The dynamics of social trust and its impact on socio-economic and business processes

The research on social trust is of significant practical importance since it allows crystallizing the institutional processes which are concerned with centralized government policy regarding the distribution of benefits, for instance in the area of tax system and the distribution thereof among people and groups in the field of social policy. Social trust contributes to the establishment of formal institutions and organizations, households and families as socio-economic areas. According to the research, Ukraine is characterized by the low level of social trust in various areas, i.e. in economic, social and political areas, which, as a result, has a negative impact on the financial area and business processes. It is argued that trust can be defined as effective when it is connected with accountability. In fact, this particular symbiosis is supposed to involve both accountability for one’s own words and actions to the others, as well as accountability to oneself without external stimuli and control. The paper defines the peculiarities of the contemporary dynamics of social trust which is characterized by the decrease and fall. The paper highlights strong correlation between the level of social trust in the society and its aggregate economic efficiency. Without mutual trust economic activity is substantially limited. As research shows, those, who have the lowest level of trust in comparison to the average level in their country of residence, are also highly likely to have lower income. The reason for this is that people with low income consider life to be unfair and that is why do not trust their environment. In other words, if the results of a particular individual deviate from the indicators of the average level of trust, then he is likely to experience failure, either because he does not trust others to such an extent that he misses the opportunity for mutual exchange and benefit, or because he is such a gullible person that he is an easy target for cheating. The paper argues that renewing and consolidating trust in the country by means of enforcing institutions of civil society is that particular premise that will lead to more effective measures in dealing with crisis. It highlights the need for a new definition of social contract that will ensure the dialogue in the country which will be beneficial to business, state, citizen and economic agents.