Building Trust in Public and Nonprofit Networks Personal, Dyadic, and Third-Party Influences Kristina T. Lambright Pamela A. Mischen Craig B. Laramee Binghamton University, New York

This article provides greater understanding of factors influencing interpersonal trust in networks composed of public and nonprofit service providers. The present theoretical model identifies propensity to trust, the perceived trustworthiness of the trustee, the relationship between the trustee and trustor, and third-party relationships as influencing interpersonal trust. The model is tested using action research data collected from a network of local social service providers. Key findings include the following: (a) Successful past cooperation between a trustor and a trustee and structural equivalence increase the likelihood the trustor will perceive the trustee as trustworthy; (b) the frequency of interactions between the trustor and trustee, trust transferability, and the perceived trustworthiness of the trustee have a direct, positive impact on whether the trustor trusts the trustee; and (c) trust between the trustor and trustee has a positive impact on expected future cooperation.

Keywords: social network analysis; network development; trust; social services

The delivery of public services is becoming more complex, with nonprofit, for-profit,and public organizations all playing a role in the new world of devolved public policy (Milward & Provan, 2000). Reflecting this trend, organizations are increasingly “net- worked” (O’Toole, 1997a, 1997b), and there is a growing scholarly interest in networks in a variety of public policy settings (Agranoff, 2007; Agranoff & McGuire, 1999; Edelenbos & Klijn, 2007; Kapucu, 2006; Milward & Provan, 1998; Musso, Weare, Oztas, & Loges, 2006; O’Toole & Meier, 2004; Provan & Milward, 1995). Drawing on O’Toole (1997a), this article defines networks as “structures of interdependence involving multiple organiza- tions” (p. 445).

Networks typically focus on specific policy or policy area (Agranoff & McGuire, 1999) and involve multiple, reciprocal exchanges (Powell, 1990). Each party in a network is dependent on resources controlled by another party, and pooling resources produces some type of benefit (Powell, 1990). Network relationships often span different sectors and include both formal and informal ties between organizations (Agranoff & McGuire, 1999).

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Authors’ Note: Please address correspondence to Kristina T. Lambright, Department of Public Administration, College of Community and Public Affairs, Binghamton University, P.O. Box 6000, Binghamton, NY 13902; e-mail:

Initial submission: March 25, 2008 Accepted: November 10, 2008

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In contrast to hierarchies, there is no single guiding organizational goal in networks (Agranoff & McGuire, 1999). “Wicked problems,” challenges that must be addressed holis- tically rather than through fragmented strategies, have contributed to the emergence of net- works in the public sector (McGuire, 2006; O’Toole, 1997b; O’Toole & Meier, 2004). Although the flexibility of networks is an advantage, they are less stable than markets and require complex coordination and accountability mechanisms (Milward, 1996; Milward & Provan, 2000).

As personal relations and structures are “embedded” in institutions (Granovetter, 1985; Uzzi, 1997), trust has been identified as critical to the functioning of effective networks (Agranoff, 2007; Agranoff & McGuire, 2001; Cross & Parker, 2004; LaPorte, 1996; McGuire, 2006; O’Toole, 1997a; Powell, 1990). Trust is essential because networks replace hierarchal power with cooperative relationships based on interdependence and have fewer superordinate mechanisms for ensuring sustained operations compared with hierarchies and markets composed of competing hierarchies (LaPorte, 1996). There has been a great deal of scholarly interest in what influences the development of interpersonal trust in iso- lated, dyadic relationships (including Bohnet & Huck, 2003; Butler, 1995; Lewicki & Bunker, 1996; McAllister, 1995; Mayer, Davis, & Schoorman, 1995; Malhotra & Murnighan, 2002; Pillai, Schriesheim, & Williams, 1999; Rotter, 1971). However, organizational mem- bers typically interact with multiple individuals and are a part of complex social networks. There is little research that has modeled and directly assessed the influence that these third- party relationships have on the development of interpersonal trust (Ferrin, Dirks, & Shah, 2006). Moreover, the majority of research that examines intraorganizational relationships has focused on the private sector although the emergence of interorganizational networks is fundamentally changing the structure and processes for delivering public goods and services (Isett & Provan, 2005).

To fill this gap, this article provides a greater understanding of the factors influencing interpersonal trust in networks, contributing to the growing literature on trust in interorgani- zational networks (including Agranoff, 2007; Alter & Hage, 1993; Edelenbos & Klijn, 2007; Lane & Bachman, 1998; Uzzi, 1997). Building on Ferrin et al. (2006), this article examines the impact that third-party relationships have on the development of interpersonal trust. However, unlike Ferrin et al. (2006), we examine an interorganizational network composed of public and nonprofit service providers rather than an intraorganizational network in the private sector. The theoretical model developed in this article also considers the impact of other factors identified in the literature on the development of interpersonal trust in dyadic relationships. These other factors include propensity of the trustor to trust, the perceived trustworthiness of the trustee, and the relationship between the trustee and the trustor. In our article, the trustor is the individual in a dyadic relationship who is placing trusting in the other member of the dyad. The other member of the dyad is referred to as the trustee and is the individual in the dyadic relationship who is being trusted. We test our theoretical model on the determinants of interpersonal trust using action research data collected from a net- work of local social service providers collaborating to address the problem of adolescent self-injury by conducting a pseudo-path analysis (Kadushin, 1995). We conclude by consid- ering the implications of our findings for trust building in networks and highlighting areas for further research.

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Factors Influencing Interpersonal Trust in Networks

In this section, a theoretical model of the factors influencing interpersonal trust in net- works is developed. There is not a universally accepted definition of trust (Kramer, 1999; Rousseau, Sitkin, Burt, & Camerer, 1998). However, there is a consensus across disciplines that the two following conditions must be met in order for trust to exist: (a) risk and (b) inter- dependence (Rousseau et al., 1998). The dependent variable in our model is trust between the “trustor” and “trustee,” where the trustor is putting herself in a position of vulnerability and taking a risk by placing trust in the trustee.