Quotes of the Day

Individuals may form communities, Benjamin Disraeli said, but it is institutions alone that can create a nation. Our courts, parliaments and associations set the collective rules of engagement that provide for the smooth and fair functioning of government, commerce and society. As the world becomes smaller, international bodies such as the United Nations and the World Trade Organization are playing similar roles on a global stage. Yet despite this growing clout (or perhaps because of it) the public's faith in institutions appears to be waning. On the eve of the World Economic Forum in Davos, we look at the reasons for this credibility crisis—and, in a series of profiles, get the bottom-up view from people whose stories of disaffection and alienation may contain clues for rebuilding the trust that binds nations and communities together

For a world leader, it must have set some sort of miserable record: in a poll last December, just 1% of French voters said they wanted President Jacques Chirac to stand for reelection in 2007. For Chirac, that capped a terrible year of economic torpor, electoral setback and, in November, a fiery eruption of social unrest in the suburbs of Paris and elsewhere. Trying to restore his authority, the French President gave a televised New Year address to the nation. "We must believe in France," he told his compatriots, in a pathos-filled speech quickly lampooned by the nation's cartoonists and columnists.

Some of Chirac's peers may be smirking at his plight, but perhaps they should take note. For the French President's rock-bottom ratings are an extreme example of a corrosive trend in public opinion that poses just as much of a threat to U.S. President George W. Bush, British Prime Minister Tony Blair and leaders of dozens of other countries, as well as to the heads of global institutions and corporations from IBM to the International Monetary Fund (IMF). As political and business leaders ready themselves for their trek to the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, they do so at a time when the mistrust of authority—and an increasingly vocal disrespect for it—has gone global. Deference is dead, replaced by sniping, cynicism and an outpouring of open protest. Thanks to the Internet, every individual's gripe can now be amplified and diffused to a mass audience, whether the gripers are retired Americans whose pension benefits have been slashed or Chinese peasants who have lost their farmland to the nation's torrid industrialization. A recent WEF poll of more than 20,000 people in 20 countries revealed that public trust in national governments, the U.N. and multinational companies dropped significantly over the past two years and is now close to the lows recorded after the terrorist attacks of Sept. 11, 2001. A separate worldwide poll, conducted this month by Gallup International for the WEF, found that six out of 10 people think politicians are dishonest. In Africa, the ratio was eight out of 10. Business leaders fared only slightly better: 40% of those surveyed said they considered top executives dishonest, while 46% said they had too much power.

To some extent, this public hostility is well deserved. The bankruptcies of Enron in the U.S. and Parmalat in Italy—and last week, the gyrations of Japan's stock market following news of alleged financial wrongdoing by Internet company Livedoor—have focused attention on corporate misdeeds on three continents. Revelations about how the Washington lobbyist Jack Abramoff allegedly bought influence in the U.S. Congress have made a mockery of claims for clean government. The U.N. is struggling to recover from its own high-level corruption scandal relating to the oil-for-food program in prewar Iraq. And, at a time when stock markets are booming, the global economy is growing at its fastest clip in three decades and chief executives are cutting themselves huge paychecks, ordinary people the world over have cause to complain about being locked out of the party. "The top of the house shouldn't continue to award itself when the folks on the lower end of the ladder suffer," says C. William Jones, a retired telephone-company worker in Easton, Maryland, who was so incensed about his pension and health-care benefits being cut that he helped start a protest group called BellTel Retirees. It now has more than 100,000 members and mainly communicates online.

Yet however easy it may be to understand, the global culture of distrust and disdain has disturbing implications. In Western Europe, for example, naysayers impede needed economic reforms. Government officials know they must implement sweeping policy changes to make their economies more competitive, but leaders who want to effect change must be concerned with the social consequences and their own reelection prospects. "We have to make strategic choices in the context of a strong questioning of our institutions and traditional systems of representation," says Sophie Boissard, a senior French civil servant who is establishing a policy-strategy unit for Prime Minister Dominique de Villepin. Along with November's social unrest, she points to falling voter participation and declining labor-union membership as evidence of growing public cynicism. In Britain, the government is trying to stop the rot with a campaign against antisocial behavior, especially among young people. Launching his "respect" initiative, Prime Minister Blair personally traveled to the town of Swindon earlier this month and used a high-pressure hose to remove graffiti from the wall of a housing project.

Taken to an extreme, distrust gnaws away at some of the fundamentals of modern society. Why vote if all politicians are charlatans? Why work if all companies are crooked? Today, "Anyone with a beef can start a conspiracy theory," says Frank Furedi, a controversial sociology professor at Britain's University of Kent, who argues that deference to traditional authorities is being replaced by reverence for new ones. "We don't trust politicians but we have faith in the pronouncements of celebrities. We are suspicious of medical doctors but we feel comfortable with healers who mumble on about being 'holistic' and 'natural.' We certainly don't trust scientists working for the pharmaceutical industry but we are happy to listen to the disinterested opinion of a herbalist."

Trust matters. If the world habitually second-guesses authorities who are accountable, however inadequately, we may find ourselves ill-prepared to meet the huge challenges posed by globalization. "In periods of great economic and technological change, trust can reduce the political, social, economic and emotional friction that often locks systems and organizations solid," says John Elkington, founder of a nongovernmental organization called SustainAbility that focuses on corporate responsibility and sustainable development. Even NGOs are affected, Elkington notes. Groups such as Greenpeace and Amnesty International have led the attack against companies and governments, and a WEF poll shows that NGOs today are the organizations most trusted by the public. But even for NGOs distrust is growing, particularly in countries such as India, Brazil and South Korea. "People will ask: who are these people, and to whom are they accountable?" Elkington says. "You don't need many NGO Enrons to undermine people's trust."

The erosion of faith in political institutions and corporations is often dated back to the countercultural 1960s. But Kate Watts, a London-based marketing expert, says a turning point could have come as early as World War I, with its senseless slaughter of young European men. She quotes two lines of a poem by Rudyard Kipling: "If any question why we died/ Tell them, because our fathers lied." In the business world, the issue goes beyond corporate image. Watts points out one big conundrum for firms today: traditional forms of advertising and marketing are proving far less effective than in the past, as skeptical consumers stop believing what the ads tell them. "We appear to be spending more and getting less," Watts concludes.

Global institutions, especially the IMF, are also feeling the direct impact of their unpopularity: in the past few weeks, both Argentina and Brazil have announced that they are paying back their entire outstanding debt to the IMF—a combined total of $25 billion—in order to wriggle free of its policy conditions. Argentine President Nestor Kirchner accuses the IMF of causing many of his nation's economic woes. In the Ivory Coast, it's the U.N. that is the focus of government wrath. Following a recommendation last week by a U.N.-backed international working group that the Ivorian parliament—which is dominated by supporters of President Laurent Gbagbo—be dissolved, more than 300 U.N. peacekeepers were forced to pull out of bases in the west of the country after they were attacked by armed groups loyal to Gbagbo. In the main city of Abidjan, protesters surrounded the U.N. headquarters and were held back by tear gas and rifle fire.

So what's the solution? Transparency and a willingness to listen and adapt can help. While November's unrest and arson attacks affected many suburbs around Paris, the town of Issy-les-Moulineaux to the south of the French capital was largely spared. There, Mayor André Santini has bet heavily on technology infrastructure in a successful bid to attract international firms such as Hewlett-Packard and Cisco Systems. He's also used technology to interact more openly with Issy's 63,000 residents. Issy was the first French town to start an Internet-based local TV service, and last December it held an online election for councilors for Issy's four districts. Candidates campaigned via their own blog pages and discussed issues with voters through the town's website. Such measures have bolstered Santini's local support: he won a landslide victory in the last municipal elections.

Corporations seeking to rebuild their image can always open their checkbooks. For example, oil giant Royal Dutch Shell, excoriated in the 1990s for polluting the Niger Delta, is spending millions of dollars to combat malaria and aids in Africa, and is funding other initiatives aimed at improving the lives of those affected by oil exploration. Other firms have tried to make their peace with often-critical NGOs. British oil company BP, French retailer Carrefour and Swedish packaging manufacturer Tetra Pak are working with the World Wildlife Fund on environmental issues.

But spending money is no guarantee that trust will be quickly won back. At least 17 people died earlier this month after an attack by armed militants on a Shell facility in the Niger Delta only days after four oil workers were kidnapped. Corporate alliances with some activist groups are often viewed suspiciously or derided as "greenwash" by more radical NGOs. Furedi, the University of Kent sociology professor, says that companies may ultimately be more hurt than helped if they try to make over their public image too aggressively, because they risk repudiating who and what they really are. "BP is spending billions to change its image, saying 'we are not a petroleum company.' They've lost belief in what they are doing and are trying to be something else. But in doing so they discredit the foundation on which they were built," Furedi says. "They are building a destabilizing dynamic that's going to blow up in their face."

Heavy-handed marketing can be dangerous for governments, too. In the U.S., recent revelations that a group close to the Republican Party planted news stories in Iraqi newspapers and allegedly paid off some prominent Iraqi religious leaders caused an uproar in Washington. Simon Anholt, an international consultant who advises political leaders on ways to improve their nations' brand images, thinks the answer lies in moving away from the current obsession with polls and focus groups. "Most governments provide second-rate customer service rather than leadership," he says. "Governments are popular when they have real problems and deal with them well."

Clarity of purpose can help with political leaders, just as it can with companies. Frustrated by constant blockage of his plans to reform the country's financial system last year—including by members of his own party—Japanese Prime Minister Junichiro Koizumi appealed over the heads of the naysayers to the public, and won a landslide election victory. The only trouble: sometimes, clear leadership engenders not too little trust, but too much of it. In the tiny Himalayan kingdom of Bhutan, the reformist King Jigme Singye Wangchuck is so popular that he is having trouble persuading his people to replace his own feudal monarchy with a parliamentary democracy. That's not the sort of popularity that is likely to give Jacques Chirac problems any time soon.

• Peter Gumbel
• Scarred by scandal, leaders in such fields as politics, business and science are viewed with mounting suspicion. How are they being undermined and what can they do to shore up public trust?