Trust is the lubricant for modern business regardless of the inroads that technology may have made. Not surprisingly developed countries especially Scandinavia have a high level of trust in their societies. This is thanks to their Government, consistency of Government policies and transparency.
This trust helps building long term relationship and cuts transaction costs in terms of insurance. High credit ratings also means easier access to funding and lower interest costs and greater level of transparency.
Unfortunately developing and emerging markets lack this lubricant of trust. It is something that comes with education, enlightened and consistent policies. Of course there are business n emerging markets that manage to build this trust over a period of time like Tata in India has done and this was magnificently and so eloquently captured by their Chairiman Ratan Tata in the "words promise is a promised" when asked if he could supply the Nano Car at less than USD 2000/- (One hundred thousand rupees) which was the USP of the Nano when inflation on material prices had inflated through the roof.
Maybe the disparity of income and social norms in emerging markets hinder development of this lubricant of trust. While trust does develop within a community and within people of similar interests and norms, it does not develop across the society. Not many people even trust the law enforcement and fear going going to the police when there is a problem.
We need to learn from Scandinavian societies and business leaders like Mr. Tata and take long term decisions rather than short term decisions that leaves everyone bruised, distressed and bitter.
Trust is something that can help a country leap frog development cycles.Unfortunately trust is also something so fragile....it takes years to build and once broken it is impossible to rebuild.
Lets celebrate trust and build a society on the bedrock of trust.