Technology: A bane or boon for cross-national levels of generalized trust?

The country-level determinants of generalized trust that usually command the most research are ethnic homogeneity, institutional performance, civic culture, and economic development. Despite the popularity and insight of this research, there is little quantitative empirical evidence that explores the impact of technology-a necessary and exogenous condition for many of these determinants-on generalized trust. In this chapter, technology measures from the World Bank are combined with a generalized trust measure from the World Values Survey and other country-level predictors from various data sources to test two competing theories of generalized trust across 57 countries. One theory, new institutional economics, argues that technology will yield formal institutions, which structure incentives and reduce uncertainty, that, in turn, increase generalized trust. The other perspective, overjustification and crowding theory, argues that actors constrained by extrinsic motivators, such as technology and institutional incentives, will attribute trust to the incentive rather than to the individual, and generalized trust, as a result, will decrease. Structural equation model results confirm the new institutional economics claim that the positive effects of technology on generalized trust are positively mediated by formal institutions. The authors conclude by outlining various managerial implications and directions for future research.