How does informal lending contribute to social cohesion in communities?5 answersInformal lending plays a crucial role in fostering social cohesion within communities by emphasizing interpersonal relationships and trust. It is a prevalent form of economic exchange in rural areas, based on reciprocity among family members, friends, and neighbors, which strengthens social bonds. Fairness reciprocity is identified as a significant motive in informal financial transactions among relatives and friends, highlighting the importance of trust and fairness in these interactions. Informal financing based on social relationships and networks provides informational advantages for entrepreneurs and lenders, contributing to economic advancement and firm growth while complementing formal financing mechanisms. Constructive informal financing, relying on information advantages and altruistic relationships, is associated with positive firm performance, further underlining the social benefits of informal lending in communities.
What creates trust ?4 answersTrust is created through various factors. One important factor is the development of trust through marketing tools, such as authoritativeness, similarity, credibility, and friendly relations. Another factor is the presence of informal social ties, which enhance trust over time. Additionally, trust can be fostered through the consistent application of consideration in interpersonal interactions, where resources are bestowed under a context of choice and with little sacrifice on the part of the giver. Furthermore, trust can be influenced by management initiatives and reforms, which may increase trust from external stakeholders but decrease internal trust and trust from users. Overall, trust is a complex phenomenon influenced by a combination of factors, including marketing strategies, social ties, interpersonal interactions, and organizational initiatives.
What is informal?5 answersInformal work refers to economic activities that occur outside of labor legislation and deviate from the formal employment relationship. It is characterized by a lack of regulation, written rules, and formal agreements, often relying on verbal understandings. The informal economy encompasses a diverse range of activities and workers, such as small farmers, street vendors, artisans, and laborers. Informal organizations are created spontaneously through personal interactions and do not have a common purpose, but they contribute to the establishment of organizational culture and improve cohesiveness within formal organizations. Informal participation refers to citizen actions and everyday practices in the public sphere that are not part of formal groups or visible demonstrations. In the context of economic development, informality refers to firms, workers, and activities that operate outside legal and regulatory systems. It is prevalent in developing countries and has implications for labor, capital, and productivity growth.
What are some of the ways in which corruption can affect the informal economy?5 answersCorruption can affect the informal economy in several ways. Firstly, corruption can lead to a larger informal sector by allowing individuals to bypass regulations and barriers through bribery or participation in the informal economy. Secondly, corruption can exacerbate the existing income gap between the formal and informal sectors, resulting in greater income inequality. Thirdly, a high level of corruption and poor institutional settings can favor an increase in the size of the informal economy. Additionally, corruption can influence the composition of the informal sector, with even larger firms preferring informality due to their superior access to corruption. These findings highlight the significant impact of corruption on the size, composition, and income inequality within the informal economy.
How does a lack of trust affect relationships?5 answersA lack of trust has significant consequences for relationships. Trust is considered a fundamental aspect of social interactions and economic transactions. In supply chain relationships, a lack of trust can lead to a decrease in commitment and performance, potentially resulting in the loss of suppliers or customers. In illicit spaces, trust is crucial for users to feel safe and for technology to function effectively. In romantic relationships, low levels of trust can lead to negative post-conflict outcomes and decreased feelings of closeness. Additionally, trust and attachment anxiety interact to predict jealousy and partner abuse, with lower levels of trust leading to higher levels of cognitive and behavioral jealousy, as well as psychological abuse. Overall, a lack of trust undermines the foundation of relationships and can have detrimental effects on various aspects of human interactions.
What is the impact social influence on trust?2 answersSocial influence has a significant impact on trust. Studies have shown that the behavior of individuals within collective structures is affected by the behavior of other members, creating a social influence dynamics within these structures. In the context of social commerce, trust is positively influenced by factors such as information quality, reputation, and word-of-mouth, while factors like communication, transaction safety, and long-term orientation have a negative impact on trust. Additionally, the use of social media as a news source and pathway has resulted in a decline in trust in news media generally across the globe. Trust in recommender systems is influenced by social stratification, with moderate income levels associated with higher levels of trust and both low- and high-income levels associated with lower levels of trust. Overall, social influence plays a crucial role in shaping trust in various contexts, including technology, news media, and social commerce.