Friday, October 11, 2013

Development can only happen with trust

IN my article last week, I looked at the role that behaviour plays in economic growth. This week I will focus on the critical nature of trust, or confidence. As I have stated on many occasions, economics is all about how we interact with each other, which means that economies, and ultimately economic development, are the outcome of the behaviour of people.

Similarly, whether a company is successful or not really depends to a great degree on the interaction between its employees and other stakeholders. In other words, it would be very difficult for a company to progress if the employees did not trust the boss, and there were no rules governing how persons should behave towards each other. This not only relates to how we work with each other, but also how we interact socially outside of work.

People have no obligation to interact with each other outside of work, but the truth is that it can assist significantly with productivity if persons working together develop a healthy social relationship outside of work related activity. This is something I say to younger professionals all the time, using the example of men who went to the same high school or have always played sports together.

What this social interaction around school or sports does is create an element of trust and commonality between individuals. So the person I attended high school with over 30 years ago, or the person I trust to ride in front of me when I am going at over 30 mph, is naturally someone I will be very comfortable dealing with in a work environment. This is referred to professionally as networking, but really goes beyond networking. It really is developing a deep confidence in someone whom you must in other important aspects of your life.

So in the cycling example above, if every week that I ride with someone, I trust that they are going to point out any upcoming obstacles in the road (pothole or oncoming car), or trust that they won't be slowing down in a manner that will cause a fall, then what this does is develop a belief in what that person says to me. In addition, if every week we have a common purpose of surviving the ride unharmed, then when it comes to work the relationship will be much enhanced.

This is why I think that being involved in sports (especially team sports) at an early age in school is so important to professional and social development. Team sports teach you to rely on, and trust, others. This interaction also teaches you whom to trust. This, of course, is something that I find has been missing from schools, as many parents focus their children on academics only, without understanding the importance of sports to social development, and also physical development.

This supports the argument that one of the most important policy initiatives that recognised the importance of relationships in economic and social development were the Values and Attitudes and PALS initiatives that were developed under the PJ Patterson administration. My own view as to why they didn't have the intended impact is simply that they were not enough of a priority for most of us, but rather just seen as a Band-Aid solution.

It would seem to me, though that this is a fundamental challenge that Jamaica, and the world, faces. We only have to look at what is happening in Washington where grown men (and I mean men as I don't really see any women involved) are unable to arrive at a consensus. The result is that many of the citizens who elected them are being negatively affected, and more importantly, the fragile global recovery is being threatened. What is amazing is that both sides want the same objective - an improvement in economic and social conditions - but are still unable to arrive at an agreement. And this same scenario has been playing out every year.

Contrast this to when Gingrich was the speaker of the House and Clinton was president. They both said they were able to resolve the matter because even before the lockdown at the time, they constantly dialogued with each other.

In other words, in the latter case, there was greater trust between both parties, and so they felt a greater confidence in what they were saying to each other. In the current case, however, there seems to be a total breakdown of trust, when you listen to the commentaries.

This of course is no different in Jamaica, where everyone is labelled either PNP or JLP, or even within the parties, where once there is a challenge of ideas there is a total breakdown of relationships between persons who were allies the previous day. This also can be seen in the relationship between trade unions and management, in both public and private institutions, or even more critically, the relationship between citizens and the police force. And we then wonder why we are unable to solve the crime plague.

This lack of trust of everyone has even found itself into our public sector rules, where, because of the lack of trust, we have managed to set up rigid procurement rules and then have seen the need to set up more than one level of managing the rules because we don't necessarily trust one organisation to oversee the process. So we have the OCG, NCC, and Cabinet all overseeing the procurement process.

The result of this lack of trust is that there is always suspicion of everything that is done in this country, and so when political parties change they dismantle even good programmes because they do not trust anyone who wears a different colour shirt. We therefore create layers of control (bureaucracy) to compensate for our lack of ability to work together, just as would be done in a company where there is a breakdown of trust between workers and management.

The consequence of this is, of course, that we spend many unproductive hours trying to discredit each other. Then we wonder why we are unable to make any progress.