The Role of the Informal Institution: How Does It Shape the Trust Relationship Between Government and Social Organizations in China?

Abstract

This paper analyses the influences of informal institutions on interorganizational trust. Based on a case study, it identifies five impact paths of informal institutions operating between government and social organizations in China: internal referencing, direct entrustment, office visits, favor provision, and key figure decision-making. Most of these function to maintain relationships and facilitate affection. Trust in these informal institutions is particularistic, exclusive, limited in transferability, discrete, and information based. Accordingly, this paper shows that while informal institutions can foster simple cooperation between a particular government and social organization, they can also strengthen the power imbalance between these two subjects and undermine basic public values.