Trust and Market Institutions in Africa

Book excerpt: This book places special focus on the importance of trust building, particularly in economies where formal legal arrangements are lacking. Taking the case of Africa, the author provides a framework of how indigenous institutions specify and define the rules, thereby allowing entrepreneurship to thrive. In particular, the book delves into the distinct evidence of institutional rivalry within Africa where competing institutions co-exist, leading to the emergence of dominant hybrid institutional forms. By placing enforcements at the heart of the issue, the author makes a convincing case for trust in a range of indigenous institutional arrangements. Based on an investigation of entrepreneurs operating across West Africa, the book explores how indigenous arrangements are sufficient in enforcing credible commitments to agreements. In the process, the author argues that trust is essential in stimulating entrepreneurial incentives in Africa. The book brings the real-world situation of local actors in live situations that almost every African entrepreneur can identify with. In a bold new step, the book attempts to show how African entrepreneurs have been able to respond to the specific socio-economic challenges of their environment and raises questions about the role of alternative indigenous institutions. For those interested in African studies, the book’s chapters and readings capture fresh insights and renewed enthusiasm for African entrepreneurship.