A venal bureaucrat is a known quantity and can be tackled effectively.
A period of transition to good and equitable governance can be more
stifling than any level of corruption and malfeasance. This is why
economic activity drops sharply whenever institutions are reformed.
II. Trust in other players
Market players assume that other players are (generally) rational, that
they have intentions, that they intend to maximize their benefits and
that they are likely to act on their intentions in a legal (or
rule-based), rational manner.
III. Trust in market liquidity
Market players assume that other players possess or have access to the
liquid means they need in order to act on their intentions and
obligations. They know, from personal experience, that idle capital
tends to dwindle and that the only way to, perhaps, maintain or
increase it is to transact with others, directly or through
intermediaries, such as banks.
IV. Trust in others' knowledge and ability
Market players assume that other players possess or have access to the
intellectual property, technology, and knowledge they need in order to
realize their intentions and obligations.
This implicitly presupposes that all other market players are
physically, mentally, legally and financially able and willing to act
their parts as stipulated, for instance, in contracts they sign.
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