Economic systems rely on many factors: the most obvious being capital, technology, and resources. However, the successful operation of an economic system also involves trust. Trust that institutions operate fairly, that contracts are respected and policy measures will be implemented accordingly is very important in this context. The latest UN DESA report points out the fall of trust toward institutions in the majority of countries, and this fact gives rise to some thoughts about economic implications of such a decline in social cooperation.
Trust is very important in today's world because it encourages people to cooperate with each other, companies, and organisations. It encourages people to observe common rules, accept government initiatives, and be involved in the economy and society.
UN DESA's latest report titled The Erosion of Trust: A Threat to Social Progress mentions that falling trust has emerged as a serious global concern. The report finds that trust in government has declined in more than half of the countries studied.
The report also highlights a generational trend: younger generations are increasingly likely to report lower levels of trust in government compared with previous generations.
The report identifies economic insecurity, inequality, perceived injustice, polarisation, the influence of misinformation, and dissatisfaction with governmental institutions as key factors contributing to the erosion of trust. It also highlights that digital technology and AI are becoming increasingly central to how the social trust process plays out. While they successfully offer new channels for communication and new tools for accessing information, they also create new challenges, such as misinformation, polarisation, and doubts about the truth of information received.
Based on current trends, and without effective action to rebuild trust, trust in institutions is likely to continue declining in the future.
The report states that trust is essential in ensuring the smooth operation of the government and social coherence. It highlights how the presence of trust also means the presence of cooperation, civic participation, and the effectiveness of public policy. It adds that trust deficit complicates the ability of governments and organizations to find solutions to complicated problems.
Source: UN DESA, The Erosion of Trust: A Threat to Social Progress (2025)
