Trust, Control, and the Economics of Governance

In today''s world, we cooperate across legal and cultural systems in order to create value. However, this increases volatility, uncertainty, complexity, and ambiguity as challenges for societies, politics, and business. This has made governance a scarce resource. It thus is inevitable that we understand the means of governance available to us and are able to economize on them. Trends like the increasing role of product labels and a certification industry as well as political movements towards nationalism and conservatism may be seen as reaction to disappointments from excessive cooperation. To avoid failures of cooperation, governance is important - control through e.g. contracts is limited and in governance economics trust is widely advertised without much guidance on its preconditions or limits.

This book draws on the rich insight from research on trust and control, and accommodates the key results for governance considerations in an institutional economics framew