Trust, Friendship & Development In Argentina

Argentina, like Winston Churchill once said of Russia, is “a riddle, wrapped in a mystery, inside an enigma.”

The country is hard to understand, harder to explain and impossible to predict. Its bursts of economic growth and progress are consistently interrupted by fits of frustration every decade or so.

Over the past 50 years Argentina has seen 17 years of recession and another 17 of hyperinflation, according to a recent Deutsche Bank report.

In 1913 Argentina was the world’s 10th richest nation. In the U.S. in the 1930s people used to describe an exceptionally wealthy person as “rich like an Argentine.” But since then Argentina has stumbled in and out of trouble, failing to capitalize on its vast natural resources and educated population.

Between 1950 and 2003, Argentina’s per capita gross domestic product actually shrank 19% to US $3,760 from US $4,656. In the same period, Chile’s per capita GDP rose 173%, Mexico’s jumped 201% and Brazil’s soared 269%. Though these three nations’ growth started from a much lower base, they all made consistent progress while Argentina declined. Clearly, something went wrong.

What?

Economists will talk about external shocks (declining commodity prices after WWI and the Marshall Plan, the Tequila Crisis, etc.), populist policies, badly-designed economic plans, war, and overly powerful unions and political instability, among other things. Political scientists point to an excessive concentration of power in the executive branch, a relatively docile Congress, an overabundance of political parties, corruption, and a lack of federalism.

But the answer may have another component and its nature is more psychological than political or economic: trust. Or rather, the lack of it.

“Our distrust is very expensive.” — Ralph Waldo Emerson

Trust lies at the heart of all healthy and productive relationships. Friendships are built on it; marriages crash on the disappearance of it; communities are organized around it; politicians, pastors and professors plummet from popularity when they become unworthy of it.

Francis Fukuyama, in his book Trust: The Social Virtues and The Creation of Prosperity, highlighted the importance of trust in the economic, political and social evolution of nations:

“Law, contract, and economic rationality provide a necessary but not sufficient basis for the stability and prosperity of postindustrial societies,” wrote Fukuyama. “They must (also) be leavened with reciprocity, moral obligation, duty toward community, and trust, which are based in habit rather than rational calculation. The latter are not anachronisms in a modern society but rather the sine qua non of the latter’s success.”

“This is true,” Fukuyama said, “in the economy as well as in the society more broadly.”

In Culture Matters: How Values Shape Human Progress, Samuel Huntington and others looked at how cultural values and habits affect economic development. The book, which elevates the debate over the Protestant work ethic and its impact on economic growth, goes a long way to show that habits, values and beliefs play a key role in economic activity.

This proposition seems like common sense. After all, if you believe deeply that it is good to make money, you’re more likely to focus on doing so, just as you’re more likely to speak truthfully if you deeply value honesty.

One of the book’s authors, economist Jeffrey Sachs, downplays the role of some values or beliefs on growth. He says economic development is probably more tied to geography (ala Jared Diamond, author of Guns, Germs & Steel) and the existence of market institutions than to things like religious beliefs.

Geography aside (Argentina actually has geography on its side), the very existence of capitalist institutions is itself likely dependent on certain cultural norms, beliefs and habits. Surely, one of those key cultural expressions is trust.

No kind of relationship can function in its absence. Governments that don’t trust people tend to be authoritarian while governments that do tend to foster open societies – that is, places where entrepreneurship and scientific research thrive thanks to a free-flowing exchange of ideas.

To cite Culture Matters:

“To trust the individual, to have faith in the individual, is one of the elements of a value system that favors development. In contrast, mistrust of the individual, reflected in oversight and control, is typical of societies that resist development. Implicit in the trusting society is the willingness to accept the risk that the individual will makes choices contrary to the desires of government. If this risk is not accepted and the individual is subjected to a network of controls, the society loses the essential engine of economic development, namely, the aspiration of each of us to live and think as we wish, to be who we are, to transform ourselves into unique beings. Where there are no individuals, only “peoples” and “masses,” development does not occur. What takes place instead is either obedience or uprising.”

While this quote refers mainly to the kind of trust that governments place in people, the concept is equally applicable to individuals within society.

People who don’t trust each other tend to be closed, guarded, overly cautious, fearful of making mistakes and even paranoid. They can be authoritarian in their relationships.

When distrust reigns, relationships become antagonistic and acrimonious; suspicion replaces benefit of the doubt. This stifles collaboration and conflict resolution. Indeed, it often leads to increased conflict because when problems arise, as they do in all relationships, the instinct to blame, which has its base in distrust, overpowers our will to solve problems through collaboration and cooperation.

This may help explain why Argentina has had such trouble resolving its problems in recent decades. Distrust is pervasive in Argentina, more so, in my experience, than in any other country. Having lived, traveled, worked, studied in or visited more than 40 countries, I have seen none where distrust seems so ingrained in society.

But if that’s the case, and it may be hard to prove that it is, where does the distrust come from? And why is it so widespread? A brief glance at history, as well as a few personal anecdotes, may help us find an answer.

A common refrain heard by visitors when they first enmesh themselves in Argentine culture is: “Acá, no podés confiar en nadie.” Translation: “You can’t trust anyone here.” This presents an interesting paradox because while distrust pervades public life (just listen to the way politicians talk about each other), it doesn’t seem to impede the formation of friendships in Argentina.

On the contrary, as anyone who has spent much time here will affirm, Argentina’s culture seems to be exceptionally good at fostering friendship. But if friendship is based on trust, and trust is scarce, how is it that friendships seem to flourish here? Indeed, friendship is a prominent pillar of Argentina’s cultural fabric.

How can that be possible? Perhaps the very distrust that so characterizes public life is itself a catalyst for the creation of friendship in private life.

As elections since 1983 have shown, Argentines clearly favor open, democratic governments that place their trust in people. Virtually nobody wants to return to the delays of the Military Junta. Yet, while Argentines want their governments to trust them, they place very limited confidence in their leaders and an equally limited amount of trust in their neighbors and fellow countrymen.

Blanket generalizations like this can be unfair and dangerous, of course. Even so, I’ve found very few friends or family members here who disagree that trust is a scarce commodity. “People are always going to take advantage of you if you let them,” a friend said the other day. “You can’t trust anybody and, if you do, that person will disappoint you eventually.” I have heard this said countless times since moving to Argentina.

The first person to warn me not to trust anyone here was my first roommate, a 3rd-year medical student in Buenos Aires. “We are very fast,” he told me in 1995. “But you have to be careful. I don’t mean that in a good way. We are very fast at figuring out how to take advantage of situations and people.”

Interesting, I thought, quickly forgetting about the comment. Months later, I found out that this same roommate had been secretly using my ATM card to withdraw money from my checking account. His total take: $1,500. Very fast, indeed.

In an email exchange last year about trust and friendship, I told a friend that I wanted to interview one of his friends, Alan Clutterbuck, for an article. The article was to be about Clutterbuck’s work at an NGO here, but I also wondered if I could ask Clutterbuck about trust and friendship in Argentina.

Clutterbuck was born in the U.S. to an Argentine family. After getting an MBA in the States, he opted to live in Argentina. He even describes himself as “un Argentino por opción.”

But his life in Argentina was far from trouble free. His father, a prominent businessman, was kidnapped and killed. A tragedy of this magnitude would rattle even the strongest family. But Clutterbuck didn’t let the incident turn him into a cynic. Instead, he began to work hard to make Argentina a better, more just country.

I was curious about all of this and wanted to learn more. I admired what my friend’s friend had accomplished. I also wanted to know how, in a country that seems to be full of cynics, Clutterbuck had avoided becoming a cynic himself. I wrote to my friend and said the following about the interview:

“Since your friend is a self-described ‘Argentine by choice,’ it would be interesting to ask him why, after experiencing such a painful and ugly thing as the murder of this father, would he still choose to live in Argentina and choose to work so hard to make the country a better place. Argentina is in some ways the most cynical country I have lived in or visited. There seems to be a great deal of distrust among Argentines. I am tempted to ask your friend how he has been able to maintain such a positive attitude about the country despite what happened to his family.”

I was also curious for personal reasons. I was faced with a decision about whether to stay in Argentina and start a family here or return to the U.S. Moreover, I felt that I was also beginning to become a bit cynical about life here, and I wanted know how one could happily live in Buenos Aires without succumbing to the city’s more negative cultural expressions.

My friend’s response was informative:

“As for your concerns; don’t think you’re the only one this happens to. It happens to those of us who were born here too. The distrust with which we live as Argentines affects the quality of the cementation of the community that we directly and irremediably form a part of. Perhaps because of that, family and friendship are so essential for us. It may be that within them lie reminiscences of the ancient concepts of tribe or clan. Whatever the case, it’s impossible to construct a modern society without modifying this belief (in trust), which has to be a founding value of any society.”

So amid all the distrust, my friend seemed to be saying, people seek refuge in friendship – in ties that bind, in ties you can trust. People seek ties they can depend upon in a world that is, or at least appears to be, untrustworthy.

Social scientists have actually done a good deal of academic work that tends to back this up: “Some research suggests that the relationship is actually zero-sum: the higher the trust in one’s own group, the lower the faith in people outside it.”

Does that means such ties – such friendships – are more necessary here than in a society where trust is abundant? Surely, there is no society in which a normal human being can feel fulfilled without friendship.

But perhaps in a society characterized by distrust, friendship is necessary – or at least in some way perceived to be necessary – for both fulfillment and survival.

If you can trust your neighbors, even the ones you don’t know, perhaps there is less of a need to form a group of friends to protect yourself in the event that a problem arises between you and your neighbor? But such an interpretation seems to belittle the real value of friendship, reducing it to a sort of Darwinian survival tool.

An alternative explanation may be that people better appreciate friendship when such benefits are nonexistent elsewhere in society.

Moreover, research done on trust seems to indicate that distrust in other members of society often tends to be related to ethnic diversity. Pervasive trust in others seems to be found more often in ethically homogeneous societies than it does in ethnically diverse ones, according to some research.

But if this is true, and not all researchers believe it is, it raises an interesting problem for Argentina precisely because Argentina’s ethnic makeup is remarkably homogeneous.

Social researchers have come to distinguish between generalized trust and particularized trust in cultures and societies. Here is how scholars put it in an essay entitled Ethnicity and Trust: Evidence from Russia:

A growing body of research on trust emphasizes the distinction between generalized versus particularized confidence in others – part of what labels “bridging” versus “bonding” social capital. Generalized trust helps promote the norms of reciprocity and cooperation that underpin civil society. It appears to reflect an individual’s belief that most others share the same fundamental values, and belong to the same “moral community.

Particularized trust entails deeper ties to a closer circle such as family members, friends, and others with similar backgrounds. Particularized trusters, as (Eric) Uslaner argues, tend to be suspicious of people they don’t know; and feel they have little control over what happens. They are also more withdrawn from society at large.

The difference is considered to be crucial for community building and public decision making. Generalized trusters appear to engage more readily in the community and in collective action, and cooperate more easily with people from different backgrounds. Generalized faith in others also seems to have a far more positive impact on the spread of information and innovation. The broader an individual’s connections, the more access to new ideas.

The authors of this paper conclude by saying that their analysis of Russians “finds low generalized and high particularized confidence in others.” Interestingly, they also “find, as several other authors do, that faith in political institutions bolsters cross-ethnic trust.”

Moreover, the authors say, this “implies that the key feature connecting confidence in government to cross-ethnic trust need not be the degree of democracy or transparency, as some authors suggest. It may simply be the provision of stable rules of the game.”

This is fascinating because Argentine history is a tale of turbulence and a constant tendency to radically change public policies from one government to the next. The only thing that’s predictable about Argentine politics is that it’s a pretty safe bet that whomever comes into power will reverse or undue many of the major policies put into place by his or her predecessor. Unlike in countries such as Brazil, Argentine public policy rarely progresses in linear fashion.

More often than not, Argentine governments undue everything done by their predecessors. Change, instead of linear progression, is the rule. The so-called rules of the game differ from year to year and from government to government. Meanwhile, Argentine history is peppered with bad, even terrible governments. So it’s not surprising that Argentines have little trust in politicians.

But what explains their lack of trust in each other?

A Brief History of Trust

To some extent, history may be a useful guide. Some historians point to Argentina’s founding as a source of some of its modern troubles. The late Felix Luna, some of whose work has been translated into English, has been exceptionally clear about this.

In A Short History of The Argentinians, Luna’s first chapter deals with the country’s “Humble Origins.” He begins by talking about Buenos Aires as the “gateway” port to the Old World. But the port of Buenos Aires was “neglected” as a principle commercial route.

Few ships were legally allowed to come in or out of the port. It was “only allowed to harbor so-called registered ships, which were authorized to sail once a year or every two years.” As a result, Luna says:

“The Porteños of Buenos Aires in those days suffered serious privations since they lacked the essential means for survival and production. They had not yet acquired the habits or the techniques for exploiting the resources available in the sprawling Pampas that hemmed them in. And so Porteños came to [depend] on bootlegging and smuggling as their only means of survival.”

He continues:

“Although a few governors such as Hernandarias tried to combat smuggling, such were the inhabitants’ needs that the Porteños acquired the habit of law-dodging. [This] offered them a better standard of living than did legal channels, which were absurdly contrary to the interests of the city.”

In some ways, little has changed since then. Argentina still struggles with its massive underground economy.

Tax evasion runs rampant. People justify tax evasion by saying government officials can’t be trusted to spend their money wisely. Meanwhile, a major source of bribery and evasion is still related to customs duties and foreign commerce.

At a press conference earlier this month, President Fernández, defending her husband against accusations of abuse of power, said her that perhaps husband’s problems were related to the fact that he pays his taxes.

“Maybe Kirchner’s problem is that he pays taxes in a country that’s too used to avoiding them. Argentina is too used to cheating. Living legally in Argentina is a problem, I admit that.”

Luna describes the Buenos Aires customs office in the 17th century as being “entirely devoted to smuggling.”

“To recap,” writes Luna, “the city of Buenos Aires was founded in 1580, lived on illegal trade and developed a habit of cheating the law.” He later described Buenos Aires as “a city that had been born and raised in lawlessness.”

Luna, one of Argentina’s most respected and prolific historians, also talks about the “organization of power” in early Argentina. This too may have had an early impact on the prevalence of distrust in Argentina. Luna:

“It should be born in mind that every city was founded by the Crown in the name of the Crown, whereas in North America settlers arrived as free citizens or as colonizing companies settling land and then founding cities. In South America, where everything was done in the name of the Crown, the founder would appoint the first members of the city council (usually between six and ten, according to the city’s size) each of whom had a different function. It was a great honor to be a cabildo; their term lasted one year and then they themselves appointed their successors. They were not voted into office by popular consent, as happened in some North American states.”

Undoubtedly, the perennial appointment of politicians by other politicians year after year had to foster distrust among citizens who had no choice or influence in the matter.

Friends in power appointed other friends, leaving average people to be skeptical about the motivations and merits of those who governed them. To some extent, this is still true in many cities and provincial governments across the country. Stories abound about family members granting power and political posts to other family members.

Even now, President Cristina Kirchner, who was fairly elected, didn’t have to be elected first in a party primary. In some ways, her predecessor and husband, Néstor Kirchner, simply bequeathed the position to her. Moreover, she herself displayed her distrust for her fellow countrymen and for the media by refusing to hold press conferences or even to debate in public.

Her implicit message to the public was, “Trust me. I deserve to be president, even though I’m not going to tell you what I’ll do after the election. I don’t have to share my ideas with you. You can’t ask any questions of me. Just trust me.”

From its inception, then, Buenos Aires, the nation’s unquestioned epicenter, has been a city defined partly by “lawlessness, illegal trade, smuggling and cheating.” Moreover, its governments often have been characterized more by nepotism than by democratic merit.

Immigration, Hierarchical Religion & Trust

Argentina’s immigration history may also have something to do with it’s current levels of distrust, according to some research. Consider this summary of a research paper written in 2005 by University of Maryland professor Eric Uslaner:

“Generalized trust is a stable value that is transmitted from parents to children. People whose grandparents came to the United States from countries that have high levels of trust (Nordics, and the British) tend to have higher levels of generalized trust. People living in states with high German or British populations (but not Nordic populations) are also more trusting (using state-level census data). Italians, Latinos, and African-Americans also tend to have lower levels of trust, but it is not clear that country of origin can account for these negative results. Overall, there are effects for both culture (where your grandparents came from) and experience (which groups you live among), but the impact of ethnic heritage seem stronger.”

In his study, Uslaner notes that high levels of trust have considerable advantages for countries:

“Societies with high levels of trust have lower crime rates.  Low trust societies have high levels of corruption.  And there is some evidence that the relationship between trust and corruption–and perhaps crime more generally–is reciprocal: Trusting societies show greater obedience to the law–and more honest societies have higher levels of trust. So living in an honest society may lead to more trust.”

Uslaner’s research highlights some interesting generalities about trust:

1) People from Denmark, Finland, Norway, and Sweden are the most trusting in the world. Naturally, these are also the countries with the lowest perceived corruption levels.

2) Protestant countries generally have higher levels of social trust than Catholic countries. The Catholic church is organized hierarchically and this makes trust difficult, Uslaner says. There is also a strong in-group identity in most Catholic countries–and again this depresses trust in strangers.

Interestingly, Ireland, a mainly Catholic country, has high levels of trust, demonstrating that simply being Catholic doesn’t condemn a nation to low levels of trust.

Fostering Trust

Is there any way to foster greater trust? If so, what would bring it about?

Apart from a “trust potion” being studied by University of Zurich scientists (no, I didn’t make this up), the key probably lies in all of us striving to behave in a trustworthy manner.

The people who most need to do this are the leaders – like Cristina Kirchner, Buenos Aires Mayor Mauricio Macri, and various governors among others – who have the greatest influence on society. Business schools that teach CEOs how to create and foster trust in their companies do so by focusing on certain key behaviors that have to be on display for everyone to see. These include:

1 – Keeping your word. If you say you’ll do something, do it.
2 – Be honest and open when communicating with others.
3 – Listen to others
4 – If asked to keep a secret, keep it.
5 – Make yourself available for questions.
6 – Show respect for others and their opinions.
7 – Be fair
8 – Cooperate. Don’t try to divide and conquer.
9 – Take responsibility. Don’t make excuses.
10 – Be accountable at all times.
11 – Seek feedback and act on it.
12 – Admit mistakes openly. Show that you can learn from them.
13 – Lead through inspiration, not fear.
14 – Practice what you preach.
15 – Be transparent

How have Argentina’s recent leaders faired on this scale? Very poorly.

Former president Néstor Kirchner and current President Cristina Fernández have shown extreme distrust for almost every sector of society. Dissent and differences of opinion are considered tantamount to betrayal.

People who question the government’s policies are labeled “coup-mongers” or “oligarchs” who want to drive the country into the ground. If you question the government’s policies, you must be doing it because your motives are questionable, not because you believe a different policy or approach might be more effective.

In a speech last week, Fernández called on Argentines to “distrust” those who disagree with her. She told them not to believe the newspapers or the opposition.

Whenever the government feels threatened by critics, presidential Cabinet Chief Aníbal Fernández typically insults the person instead of laying out a precise case for why the person’s ideas are misguided.

It’s rare for a week to go by in which the government’s spokesman does not insult someone.

Buenos Aires Mayor Maucirio Macri is often a target of Fernández’s vindictive wrath. Fernández doesn’t offer deductive arguments to highlight what he believes are Macri’s deficiencies. He simply insults the mayor, saying things like, “Macri is lazy. He’s never worked a day in his life.” Or, “Macri has never even read a book. He’s spoiled.”

Macri usually is one of the more tactful, diplomatic leaders on the national stage. But even he reportedly fell for Fernández’s trap once, allowing himself to step into the gutter and describe Fernández as an “ass-faced” official.

This kind of verbal pugilism is an appeal to the lowest common denominator, a leap into gutter-level debate unworthy of a proud people and an aspiring free nation. It is precisely the opposite of what inspiring leaders do when they seek to foster trust.

Perhaps the single most damaging thing the government has done recently, critics say, is to have restructured the national statistics institute, Indec, and changed the way it measures key economic data like inflation and economic growth.

For several years Indec has been reporting inflation data that seem innocuously low. Virtually all economists, diplomats, academics and businessmen say the data are unreliable. Manuel Garrido, former head of the government’s anti-corruption office, said this week that Indec is guilty of fraud.

Right or wrong, the truth is that virtually nobody in Argentina trusts the data. Nor does anyone believe the government when it says inflation doesn’t exist.

President Fernández has defended the data repeatedly and denied charges of wrongdoing. But the government hasn’t assuaged the concerns that it is lying to the public about economic data.

In some ways it matters little whether the data are accurate. In the eyes of many Argentines, the government’s credibility is gone. Inflation may not exist, but distrust certainly does.

Of course, the Kirchners aren’t the first leaders to govern in ways that foster distrust in politicians. Myriad examples can be found throughout the country’s past. One of the most egregious blows to trust came in 2002, when then-president Eduardo Duhalde ordered the government to convert people’s dollar-denominated savings into devalued pesos. Duhalde had told people he wouldn’t do this. “He who put dollars into the bank will get dollars back,” he said.

That didn’t happen. He who put dollars into the bank got devalued pesos back, losing a substantial portion of his savings. The conversion of peoples’ pesos into dollars was tantamount to theft. It fundamentally crippled confidence in the political system.

Before the currency devaluation, a prominent local economist in 2000 wrote an article for La Nacion in which he said, “It seems like distrust is the predominant sentiment in Argentine society.” He was right.

About five years later the chief of the anti-kidnapping unit in the Province of Buenos Aires was charged with kidnapping. The news made headlines, of course, in the country’s major newspapers, giving people one more reason to distrust the state in general and police in particular.

Examples of how public behavior fosters distrust abound.

To be sure, no country is immune to abuse of power and unethical conduct.

Former U.S. president Richard Nixon repeatedly lied to people, causing trust in government to plummet. But at least Nixon’s conduct forced him out of power. Here people have lost faith in the justice system, believing that it is rare for politicians – or even ordinary criminals – to be held responsible for their actions.

That belief is both a derivative of – and a reason for – distrust in the justice system and in the state.

Distrust also reigns within the government.

President Fernández recently cancelled a long-planned trip to China because she was afraid of what Vice President Julio Cobos might do (as acting president) while she was gone. It was the ultimate display of distrust.

Few countries are as important to Argentina’s economy, and its future, as China. Indeed, China arguably has more influence on Argentina than any other country, with the exception of Brazil. Fernández cancelled the trip, from one day to the next, because she doesn’t trust her own VP.

Trust and the Economy

“There are, to be sure, pervasive barriers to investing.
The most serious is a lack of trust. But trust can be built.
Former U.S. Treasury Secretary Paul O’Neill,

O’Neill was talking about Russia. But he just as easily could have been talking about Argentina, where distrust has long been a critical barrier to investment.

It wasn’t too long ago that yields on some Argentine bonds hit 50%, reflecting widespread distrust in the government’s ability and desire to pay back its debt.

That distrust, which deters investment in government bonds, is matched by a lack of faith in banks and other institutions. As a result, Argentina’s financial system is substantially weaker than it would be if generalized trust in institutions were higher.

Because people fear the government will do something unwise, they have little faith in the value of the national currency, the peso. As a result, whenever people get nervous, they run to the bank and withdraw their money so they can buy dollars.

But this forces banks to raise the interest they pay on deposits in the hopes that doing so will prevent people from withdrawing their money. Paying these higher rates means banks have to charge more for the money they lend to individuals and companies.

That, in turn, makes it more expensive to borrow money which, in turn, means that people and companies spend and invest less, thereby creating fewer jobs and services. The cycle is a vicious one and it is based almost entirely on trust and confidence.

Researchers don’t entirely agree about the role that trust has on economic development, but one team of analysts concluded that the relationship is significant:

“Even in a growing economy, interpersonal trust is a powerful economic stimulant: a 15 percentage point increase in the proportion of people who report that others in their country are trustworthy raises per capita output growth by 1% for every year thereafter. Further, economic growth initiates a virtuous circle as income gains enhance interpersonal trust.”

World Bank economist Stephen Knack and Claremont Graduate University professor Paul Zak have highlighted five factors that they believe provide a pillar for trust in society: 1) formal institutions that enforce contracts; 2) social norms that restrain cheating; 3) social and economic heterogeneity that exacerbate informational asymmetries; 4) wealth; and 5) income.

In some ways Argentina seems to lack “social norms that restrain cheating.”

Avoiding taxes is practically a national pastime. So is running through red lights and cutting in line.

Ever heard of Diego Maradona’s famous “Hand of God” goal?

Maradona cheated, scoring his famous by using his hand.

Instead of suffering social opprobrium, Maradona has won praise for the goal. People laugh at the goal, scoffing at the notion that it did any harm. To some extent, they’re right. But few people seem to reflect seriously on the fact that he nevertheless cheated.

Maradona’s goal caused no great, tangible harm. He cheated during a soccer game, not in a real life event where anything genuinely substantial was at stake. Even so, he cheated. He broke the rules, violated the norms that allow for sporting events to provide meaning through legitimate, fair competition.

How many school children in Argentina have had a seminar about the ethical nature of Maradona’s goal?

The Rule of Law

In all of the five categories highlighted above Argentina has trouble. Instead of enforcing contracts, the government has in many cases been the agent most responsible for breaking them.

A case in point is the government’s recent expropriation of the flagship airline Aerolineas Argentinas from the Spanish travel company Grupo Marsans.

The government agreed to buy the company from Marsans back in July of 2008, but it later reneged on the deal. A Marsans spokesman described the expropriation as “scandalous” and “absurd.”

To be fair, the government said it was Marsans that was violating its contract, failing to keep its word and invest in the airline. Marsans said the government made it impossible for it to keep its end of the bargain.

In any case, the government often breaks private sector contracts, such as it did by nationalizing the right of private companies to broadcast soccer matches or by nationalizing people’s private pension funds.

In addition, the government often implements policies whose application is retroactive. Government policy is, in short, predictably unpredictable and erratic. The rule of law, as a result, sometimes seems more like a lofty goal than a concrete reality.

In Trust and Economic Development, Dutch researchers downplay  a conclusion by Knack and Philip Keefer that trust undergirds economic growth. ”According to our analysis, the effect of a 10% point increase in trust has an effect on growth ranging between 0.4% points and 0.8% points, depending on the set of conditioning variables.”

The Dutch academics conclude that, once all variables are considered, “trust is never significantly related to economic growth.”

Yet, such a conclusion defies common sense. Even if the tangible impact of trust on growth is hard  to quantify, trust is, indeed, the sine qua non of all relationships.

Without it, social and economic development would be excruciatingly slow or even non-existent. Personal friendships also would atrophy, devolving into antagonistic relationships.

In a speech earlier this week, President Cristina Fernández waxed philosophical, saying that you can’t have friends if you don’t have enemies. You can’t have one without the other, she said. You must know both to be able to distinguish them.

It was an odd thing for a president to say.

But so was the president’s recent claim that she had been censored during a nationally televised press conference. She hadn’t been.

Fernández made the claim during an argument aimed at proving that Argentines shouldn’t trust the media. She made her argument in a bid to gain trust.

But it’s hard to understand why she would have made a patently false statement if she was trying to get people to accept her word, and not that of the media, as the truth.

Conclusion

It’s hard to know precisely where all of this distrust comes from and what needs to be done to rebuild trust in government institutions, in public life in general, and among individual Argentines in particular.

A brief look at history, a cursorial overview of academic research, and a few personal anecdotes are insufficient to offer a fully satisfactory explanation.

But accepting the status quo has done nothing but stifle progress, impede development, and prevent Argentina from achieving its enormous potential.

It’s important to ask why this is the case.

It’s even more important to figure out how trust can be become a pillar of public and private life. It’s important to ensure that trust becomes “the predominant sentiment in Argentine society.”

When that happens, Argentina will no longer be a “riddle, wrapped in a mystery, inside an enigma.”

It will be the envy of the world, a country of boundless possibility that has, finally, fulfilled its potential.

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