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 successful trading networks built on kinship, reputations and trust. Modern economies changed this storyin two ways. The first was institutional.Bank accounts and credit scores signal who can be trusted with credit. A driver's licence certifies that you can operate a car without endangering others, and a professional licence that you can practice medicine, law, or architecture competently. The second change came with the internet, which lets us contract with people we have never met except online. We pay an online seller because a platform guarantees a refund, and we get into a stranger's car because an app has rated the driver as trustworthy. Going by surveys, India appears to have a trust problem. The best among these, the World Values Survey, which interviews a nationally representative sample face to face, asks people whether "most people" can be trusted. The most recent round of that survey found that only 17% of Indians said most people can be trusted, placing India 53rd of roughly 90 economies. By comparison, 74% of Danes and 37% of Americans answered the same way. In contrast, online polls such as Edelman's, which reach mostly urban, wealthier Indians, show higher levels of trust in Indians, which is itself telling. The question about "most people" in practice often means someone from another caste or community. Within one's own group, trust is strong and economically valuable. A study of a large State-owned bank used records on the religion and caste of loan officers and borrowers, along with a staff rotation policy that paired them essentially at random. When the officer shared the borrower's group, borrowers got more credit and posted less collateral. Economist Karla Hoff has spent yearsrunning experiments for real money invillages in Uttar Pradesh. One of her studies tested something that is an essential element of trust formation among strangers: whether people will pay a small price to punishsomeone who cheats a third party. Men from the unreserved caste category readilypunished cheating when the victim was from their own caste and were far more lenient when the victim was from the reserved castes. Men from the reserved-category castespunished cheating less overall, as if they did not expect fairness of rules to protect people like them. Where bystanders will not enforce fair dealing on a stranger's behalf, trusting a stranger is risky. In this light, reluctance to trust broadly makes sense. Another study found that honour can get in the way of forgiveness, which is essential to building trust and cooperation. Men played a game in which both partners do best by cooperating, but whoever tries to cooperate loses a little if the other doesn't. Reserved category pairs settled into cooperation quickly, but unreserved category men were much less likely to keep trying after a partner let them down, and the researchers concluded that they took the lapse as an insult rather than an accident. The meaning attached to identity was a barrier to cooperation. Circles of trust can be shifted by something as simple as playing cricket. The economist Matt Lowe randomly assigned young men in Uttar Pradesh to cricket teams that were either mixed or single-caste. In a finding that will resonate with anyone who has watched the movie Lagaan, playing alongside men of other castes increased cross-caste friendships and willingness to cooperate, but playing against them did not. It is possible to build trust across caste lines through social design, and a national youth development corps could help in this regard. These patterns of trust are also found atthe scale of whole cities. Political scientist Ashutosh Varshney compared Indiancities with similar Hindu and Muslimpopulations but very different historiesof riots. The peaceful ones had denseassociational life such as business chambers, trade unions, and political parties in which Hindus and Muslims worked together. Trust built through shared work held where casual neighbourliness was disrupted. Trust in institutions works in a similar way. Analyses of the India Human Development Survey find that region, class, and caste all shaped who trusted institutions such aspanchayats and government bodies. People trust institutions if institutions have treated them well, and in India that treatment has long differed by caste and class. India, as a society, does not lack the capacity for trust. Indians extend it generously within circles drawn by history and caste, but extend it far less readily to the broader community. Do India's new digital rails make any difference? UPI, Aadhaar-based verification, and platform ratings let a Dalit seller and a Brahmin buyer complete a transaction in which caste plays no role in whether the deal goes through. Nobody asks an Uber or Ola driver about their caste before getting into their vehicle. It is possible that the digital world may let trust form with caste taken out of the equation, first for simple transactions and perhaps later for more involved ones. Whether anonymity builds trust between strangers over time or simply lets people transact without ever needing to trust is still an open question for a country where a greater ability to trust strangers could make all the difference to achieving Viksit Bharat in the foreseeable future....