Politics

Trust as Infrastructure: Why India’s Low Social Capital Is an Economic Problem

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Trust functions like economic infrastructure: it lowers transaction costs, enables scale, and allows markets to extend beyond personal networks. When institutional reliability is weak, individuals rationally rely on relationships instead of rules, keeping firms small and growth constrained. Strengthening courts, accountability, and equity can gradually expand generalized trust.

Six Months, Twelve Domains, One Uncomfortable Conclusion

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India’s institutional outcomes often reflect rational behavior inside flawed systems rather than individual failure. Incentives reward visible, short-term results over long-term capacity building, while interconnected weaknesses—low trust, slow courts, limited state capacity—reinforce each other. Yet successes like digital public infrastructure show that deliberate institutional design can produce world-class outcomes.