Economy of Trust

The Economy of Trust refers to how trust between people and institutions reduces the need for constant monitoring and enforcement in transactions. When individuals trust each other, exchanges—such as buying, selling, or sharing—are smoother, faster, and less costly. This trust encourages more cooperation, investment, and economic activity because parties believe others will act honestly and fulfill commitments. Essentially, trust acts as an economic lubricant, creating efficiency and growth in societies by minimizing the need for excessive rules or oversight.