India, Nov. 6 -- What makes some societies more successful than others? Is it something about culture, the education system, or scientific prowess? Underneath many of these measurable attributes is trust, which economist Kenneth Arrow called the lubricant of the social system. Trust both lowers the cost of every exchange or interaction and is associated with higher economic growth.

As one example, societal trust limits how large firms can grow. In fact, a study of Indian textile firms by Stanford professor Nicholas Bloom and colleagues found that the number of male family members was among the best predictors of how large a firm became. Through most of history, business ran this way. In India, Marwari, Gujarati and Chettiar merchants ran...