Trust, cooperation, and implementation of sustainability programs: The case of Local Agenda 21

This paper provides evidence of the role of trust in ensuring desirable economic outcomes. We examine the implementation of Local Agenda 21, a regional sustainability initiative that requires the coordination of diverse decision-makers, in a sample of approximately 66 developing and industrialized countries. We use a game theoretic framework to motivate the empirical model. We find that higher levels of citizen trust are associated with more communities in a country adopting a program that requires coordination of multiple stakeholders. We also find that more programs are adopted when the country's institutional structure is likely to reduce the cost of coordination and when the benefits of the program, measured by environmental quality, would be expected to be greater.