Honesty test: lack of integrity is bad for the economy, scientists conclude

An integrity study conducted by Essex University has suugested that an erosion of trust between people can have economic as well as social consequences.

According to the report’s author, Professor Paul Whiteley, an increase in dishonesty is usually accompanied by an economic downturn.

He writes: “Trust is important because it allows individuals to move beyond their own immediate family or communities and engage in co-operative activities with strangers. High level of trust in society help to save on what economists call transaction costs – the price people pay for doing business. “In a trusting society these costs are likely to be small, since if people give their word that they will do something then generally they can be expected to deliver on that promise. There is no need to draw up elaborate legal contracts to enforce agreements.

“In a non-trusting society, however, things are different and enforcement mechanisms such as formal contracts and courts are required to ensure compliance, and these all make the costs of doing business higher. Clearly, integrity is essential to the building of trust.

“Empirical research suggests that societies in which trust and integrity are strong perform much better on a range of economic and political indicators than societies where they are weak.”

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Categories: Europe, UK

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