Center for Business and Government

20 May 2003

Dear CBG Faculty, Fellows, Staff and Friends:

There has been a marked increase in public distrust of major social institutions in the past year. CBG has been exploring this critical issue, on which so much else in society depends.

On April 23, Cary Coglianese, Jennifer Nash, and Bernie Cahill organized a Regulatory Policy Program panel discussion entitled "Whistle Blowers: Dissent Within Organizations." The panel featured FBI agent Coleen Rowley, who has been praised for her public questioning of the FBI's handling of the Zacarias Moussaoui case in the weeks leading up to the September 11 terrorist attacks. Rowley pointed out how difficult it was to speak out about concerns she had with decisions that had been made by her employer, particularly because the FBI relies heavily on the trust of the American people. Ultimately, however, Rowley explained that many people's personal sense of integrity impels them to voice their concerns, preventing potentially harmful situations even at the expense of their own careers.

From April 24-26, Iris Bohnet led a seminar on "Trust and Institutions." This seminar featured the presentation of a paper by Bohnet and Richard Zeckhauser entitled "Trust, Risk and Betrayal," which explores the factors that affect an individual's decision to trust an anonymous stranger. Other presentations focused on cross cultural differences in individual's willingness to trust, and trust and pricing in customer markets.

In China, SARS has profoundly affected the new government. As CBG's Joan Kaufman explained in her April 27 article in the Washington Post, the Chinese government downplayed the danger of the disease in order to prevent public panic and to avoid scaring away business and tourists. There are no checks and balances within the government, no watchdog agencies, and no free press to challenge the government's response or even to make the public aware of the impending danger. This lack of transparency not only allowed government officials to make policy decisions that ultimately had a detrimental effect on the health of its citizens and the Chinese economy, but it was also counterproductive. Workers who were told to stay in Beijing fled into the countryside, bringing SARS into precisely the areas where the health care system is least equipped to handle it.

Professor Alan Whiteside from the University of Natal's Health Economics and HIV/AIDS Research Division visited CBG this month to speak about the implications of HIV/AIDS in South Africa and other countries with alarmingly high prevalence rates. Similar to China, many South Africa government officials have a record of publicly denying the severity of the HIV/AIDS problem in their country and avoiding responsibility for taking action. As the people's trust in the government's ability to respond to issues related to HIV/AIDS wanes, one potential strategy to bolster the existing infrastructure in South Africa is the formation of partnerships with the business sector. We are pleased that Professor Whiteside will be participating in the next "HIV/AIDS and Business in Africa and Asia: Building Sustainable Partnerships" workshop sponsored by CBG on June 9-10 in Durban, South Africa.

The upcoming month promises to be a busy one here at CBG. Bill Hogan and the Harvard Electricity Policy Group are hosting their thirty-first plenary session on May 21-22. Robert Stavins will be leading an executive education program for managers and policy makers on "Understanding Environmental Economics." We will also bid farewell to twelve CBG Fellows as they complete their research projects here at the Kennedy School and move on to new endeavors.

Valuing trust in institutions and maintaining open channels of communication between different sectors is at the core of what we do at CBG. I hope you will visit our website to learn more about our activities and how you might be able to get involved.

Have a great spring - now that it's finally here.

Cheers.

John G. Ruggie
Weil Director, Center for Business and Government
Kirkpatrick Professor of International Affairs