Trust and Reputation in Community Care: theory and evidence

Central to the new quasi-markets in the public sector is the explicit articulation of relationships between purchasers and providers. Many authors have therefore noted the relevance of the economic literature relating to principals and agents to such markets. Indeed one of the side-effects of the quasi-market reforms has been a flourishing interest in models of public sector procurement. Much of the discussion relating to such models has noted the importance of trust in almost all such markets, notwithstanding the reliance on formal contracts to articulate responsibilities. This chapter therefore explores the part played by trust in one particular agency relationship: that between local government purchasers and providers of social care, set up in the UK Government’s ‘Community Care’ reforms. However the results are likely to be applicable to many other quasi-markets.