Monday, 1 April 2013

Public trust in the private sector in Africa

One recurrent theme of this blog is reflections on building trust between government and business in Africa.

But what do we know about levels of citizens' trust in / of big business in Africa -- and the potential utility of such trust as a possible resource for achieving public goals?

In the context of current Cypriot banking woes, this week's blog-post is prompted by an article in last week's Financial Times on what recent survey data in developed countries reveal about declining public trust in banks and corporations.

A cursory search does not yield equivalent opinion poll data across African countries. Afrobarometer of course surveys public attitudes on democracy, corruption and so on -- but almost nothing on 'the private sector', 'corporations', or 'business'.

Yet I'd be surprised if the average African survey respondent would be as sceptical of corporations as their peers in Europe. (For instance, the high proportion of unbanked Africa citizens does not necessarily reflect lack of trust in private financial institutions but rather issues such as the level of middle class development in many African economies.)

If this intuition is correct, it may nevertheless be highly variable as between sectors -- mobile phone companies, for instance, may be more trusted by consumers than their corresponding ministry or regulator, but this may not be true for extractive industries; it might also be subject to variation across countries -- South Africa's public is no doubt more familiar (for better or worse in opinion terms) with big-name firms than is Mozambique's.

One would need respectable data. Some of what data-sets do exist are inconclusive of the relative trust of public institutions compared to private service providers (eg academic studies on comparative levels of trust in public and private healthcare provision in previously isolated economies). Like all such surveys, any one on this topic -- what are the levels of public trust in corporations in Africa -- would turn on methodology and framing of questions:

* It would, I suppose, be necessary to distinguish brand loyalty or aspiration from more general, almost ideological attitudes toward private business actors and activity in and across different African countries.
* People may trust foreign firms more than their own government, or more than the firms' country of origin, or more than citizens in other emerging regions do. Yet they might at the same time potentially not trust policies of market liberalisation which encourage such firms' entry [*].
* On this wider topic, distrust of government and distrust of business may be linked, where distrusted political elites control business activity, or where it is difficult to distinguish predatory or exclusive business activity from government action. Many people's encounters with bigger businesses in Africa will, moreover, be with state-owned firms.

The wider question -- here more a form of thinking aloud -- is whether, if the intuition is well-founded that in many developing African countries people might trust companies as much or more than government, or trust them more than in developed countries, this creates a potential resource for improving social and economic development outcomes:

* Aid agencies might think afresh about partnering with big business on the basis that the latter's perceived trustworthiness creates a platform for innovative strategies that have mutual benefit for agencies and corporates;
* If public-private partnerships remain the buzzword of African development and the private sector is envisaged to have an expanded role in meeting development aspirations, it would be useful for strategy-formation to know whether people trust businesses (of various kinds and origins) more than local or foreign public and civic institutions.

That is, if surveys revealed that many citizens in African countries do not hold a jaded view of important kinds of companies, this is one factor for firms in conceiving fresh ways of doing business and relating to publics and authorities in ways calculated to preserve and enhance mutual trust. This might hold important portends for regulating corruption and greater revenue transparency -- as well as mitigating the risk, as African economies grow at rapid rates, of future highly disruptive discontinuities that might occur from a serious deficit of public trust in the market-place.

Finally, I wrote this post with big business (multinationals) in mind: like the citizen's relationship with government, it implies a somewhat vertical relationship. Of course, most (by number if not value) of the commercial transactions on any given day in an African setting are typically more horizontal, between individuals and groups. There trust is a vital resource in stable relationships of exchange and value-creation. One does not need to adopt a fully market-led approach to development to agree that building trust in relation to smaller-scale and less formal business institutions is likely to increase the potential for economic vitality capable of having transformative social and developmental benefits.


ps, for one of the various posts where business-government trust is discussed, see here.

[*] = ps, for one academic study on public opinion democracy and market reform in Africa, see Bratton et al, here; for an example of one country study on attitudes to pro-market reforms see here (Ghana -- Afrobarometer).

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