As I was racing toward the final pages of Beinhocker’s The Origin of Wealth, among the public, there was a growing distrust against the judiciary in Malaysia. Coincidentally, the final chapter of The Origin of Wealth discusses how trust is an important component in building a successful society. Trust is one of many important ingredients toward cooperation and greater economic activities between individuals.
Beinhocker states that a society of trustworthy individuals encourages cooperation. He strengthens his assertion with a correlation between trust level of societies and level of gross national product or roughly in layman’s term, wealth of societies; the correlation is positive. The rationale is quite logical.
In any dealing, especially under which past dealings are considered, many would try to avoid entering into any agreement with those of low reputation or untrustworthy. This scenario could easily be illustrated by a repeated game with players utilizing adapted tit-for-tat as a strategy. In this scenario, bad reputation or untrustworthiness leads to uncooperative behavior by the cheated player. The behavior acts as a punishment by the cheated onto the cheating player.
Although Beinhocker is referring to trust between individuals in his book, his conclusion could be adapted to accommodate relationship between individuals and institutions.
Referring to the alleged corruption of the Malaysian judiciary, the players in the game could easily be comprehended as civil society and the judiciary. When the judiciary exhibits actions which lower its reputation, the civil society has little reason to trust with the judiciary.
The judiciary is the arbitrator of conflict between individuals and the perception of neutrality is important to convince relevant individuals of the trustworthiness of the judiciary. Without neutrality, there is little reason for individuals to trust and approach the arbitrator to solve any conflict. If such outcome which the perception of neutrality is absence is repeated overtime, individuals, who may initially grant the arbitrator their trust, will update their expectation and become distrustful of the arbitrator. The final result will be a complete disregard and dismissal of the arbitrator.
The lack of trustworthy judiciary takes away a reliable neutral arbitrator from the society. Without a good institution to govern relationships between individuals, transactions between individuals will fall in volume, as each individual now becomes wary of being cheated by the other without recourse to justice. Economic activities will decrease, making the society as a whole worse off.
Distrust against the judiciary may even lower the possibility of peaceful resolution to any conflict. When the law through the judiciary is unable to dispense justice, one will take justice into his own hands. This among others would give way to the rise of vigilantism. If vigilantes patrol the street, then it will challenge the state’s monopoly to legitimate use of force.
The integrity of the state itself is at stake, adversely affecting stability and in turn hurt economic growth in compounding manner.