Trust and cooperation are at the heart of the two most important
approaches to comparative politics - rational choice and political
culture. Yet we know little about trust's relationship to political
institutions. This book sets out a rationalist theory of how
institutions - and in particular informal institutions - can affect
trust without reducing it to fully determine expectations. It then
shows how this theory can be applied to comparative political
economy, and in particular to explaining inter-firm cooperation in
industrial districts, geographical areas of intense small firm
collaboration. The book compares trust and cooperation in two
prominent districts in the literature, one in Emilia Romagna,
Italy, and the other in Baden-Wurttemberg, Germany. It also sets
out and applies a theory of how national informal institutions may
change as a result of changes in global markets, and shows how
similar mechanisms may explain persistent distrust too among
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