Trust as a Cause and an Effect of Institutional Design Features

We identify interstate trust as a sociological variable which is by now only insufficiently accounted for in the research program on the design and effects of international institutions. In contrast to rationalist conceptions, a sociological notion of trust is not purely information-based but emphasizes group-dynamics, identity-cohesion, emotional bonding, and normative considerations as key features of trusting relationships. The shortcomings of a rationalist approach may lead to flawed theoretical reasoning on and empirical investigation of the nexus between trust and the choice of certain institutional design features. In our theoretical paper, we show that sociological trust can be both cause and effect of certain institutional designs. First we argue that trust is a precondition for the choice of specific institutional designs. We use varying trust levels as an explanatory factor that affects the choice and design of those institutional elements that are installed to control member states’ behavior and to limit the risk of defection. Second, we theorize on institutionalized cooperation as an explanatory variable for the development of trust. However we do not only argue that institutionalized cooperation leads to trust but also hold that differing design features exert varying trust-building effects. Third, we show that trust that has been built through iterated interactions within cooperative institutions can permit states to relinquish on certain costly design features and to adapt institutional design to new conditions within post-agreement negotiations. We propose a theoretical model that emphasizes that trust, trust-building and institutionalized cooperation interact in a cyclical and reinforcing, self-enhancing way. Hence an institution under certain conditions may itself create the preconditions for its own adaption or even abolition. Finally we provide some anecdotic empirical evidence and discuss opportunities for empirical research on the nexus between trust and institutional design.