Thursday, June 28, 2018

377. Trust in Japan and the US

In his book on trust, Fukuyama (1995) claimed that Japan is a ‘high-trust society’, along with the US (and Germany). Indeed, Japan is said to be ‘the society that displays perhaps the greatest degree of spontaneous sociability among contemporary nations’[i], where that sociability is defined as: ‘the ability to come together and cohere in new groups, and to thrive in innovative organizational settings’.

From the ‘World Values Survey’ also it was reported, in 2005, that Japan was among the countries with the highest score on the proposition ‘most people can be trusted’.     

Yamagishi & Yamagishi claimed the opposite: trust in people in general is much lower in Japan than in the US. This was based on a survey with the proposition ‘Most of the time people try to be helpful’, 47% of respondents agreed in the US vs. 26% in Japan.[ii]

Instead, and as a compensation for this lack of general trust, Japanese employ stable relationships, in tight networks of family and long term relations, based on loyalty and internal monitoring and sanctioning.

Yamagishi & Yamagishi noted that this locks people up in existing relationships, at the sacrifice of possibly new and more productive relationships with outsiders. There is also a vicious circle: not going outside one does not develop the cognitive and social skills of judging the reliability of possible new partners.   

Interestingly, Fukuyama did note that when Confucianism migrated from China to Japan, in the seventh century, emphasis shifted away from benevolence and filial piety to loyalty to the leader, and ‘reciprocal obligation based on exchange of services … entrenched in feudal traditions’.[iii]  That does seem to connect to the analysis of the Yamagishi’s.  

How is this divergence of findings to be explained? To answer this question I employ the categorization that I developed in my 2012 book on trust[iv], and that was also used in earlier items in this blog. There, I distinguished different features of trust that need to be considered
, to avoid confusion.
Perhaps the most important distinction is that between reliance and trust. One can rely on people in two ways. One is control, where one manages the room for misconduct, by contract or hierarchical control, and incentives for good, non-deceitful conduct. The second way is trust, which goes beyond control, in the expectation that people will not deceive even if they have the room (opportunity) and incentives (gain) for it.

The second distinction that I make is that between factors within a relationship and institutional factors outside it.  

Outside the relationship, control can be based on the law, and contracts based on it, as reputation effects as an incentive. Inside the relationship, control can be based on hierarchy, or a balance of mutual dependence, or the use of a hostage.

Outside the relationship trust can be based on generally shared ethics and morals. Inside the relationship it can be based on routinization in long term association, empathy, identification, friendship or love (as in a family).

An overview of these factors is given in the table below.

                                                           Sources of reliability


                                    Outside                                   Inside


  room for conduct      contract, the law,                    hierarchy, mutual dependence,
   incentives                  reputation                              rewards, punishments

Trust                             ethics, morals, shame           routinization, empathy.
                                                                                          identification, loyalty,
                                                                                          friendship, love 

Now, in this framework I can to some extent locate the positions of Fukuyama and the Yamagishi’s, as follows.

Apparently, the Japanese mostly employ the internal factors of hierarchal control and personalized trust based on loyalty. However, I wonder: if generalized trust is indeed lacking, as the Yamagishi’s claim, in an absence of shared generalized, non-relationspecific ethics and morality, how about using the opportunity for control from institutions of law and regulations, and outside reputation mechanisms? Do they forgo that opportunity? If so, why?

How about the US? Is cooperation there indeed based on generalized trust, in a shared ethic and morality, or more on control with contracts and reputation? The latter seems more plausible. That is how the US is widely perceived: as a highly legalized society rather than one based on forbearance and benevolence. Could it be that in the surveys, and their interpretation, there is a mix-up between the two? Perhaps what is interpreted as generalized trust is in fact mostly reliance on such control.

Further empirical research seems needed that takes these considerations into account.

[i] Francis Fukuyama, Trust; The social virtues and the creation of prosperity, 1996, Penguin, page 150.
[ii] Toshio Yamagushi & Midori Yamagushi, ‘Trust and commitment in the United States and Japan’, Motivation and Emotion, 18(1994), p. 129-166.   
[iii] Fukuyama, op. cit. p. 182.
[iv] Bart Nooteboom, Trust: Forms, foundations, functions, failures and figures, 2012, Cheltenham UK: Edward Elgar.