Trust is a powerful contributor to success in public-private urban regeneration partnerships
One of the key conclusions of the PhD research by Carley Pennink (IHS, Institute for Housing and Urban Development Studies) on the role of trust in partnerships between the public and private sectors is that ‘trust can influence risk and of outcomes as perceived by the partners in these partnerships’. It is vital to invest in building trust between partners as trust can act as a governing mechanism in situations of high risk and is important in achieving outcomes, including, for instance, the tendency to cooperate, coordination efficiencies and the realization of innovation.
The PhD dissertation explores how trust is built over time in three long term, urban regeneration partnerships between the public and private sector. It charts the changes in levels of trust between partners over the length of the partnerships, in the form of a ‘trust cycle’, and explores the factors that build trust.
The research argues that when trust is strong, not only will partners have a perception of reduced risk, but they will also be willing to take more risk, something a rational agent might normally not be willing to do. This research also contends that, as the interaction between partners continues, and outcomes of this interaction meet expectations, trust is built. This trust will then influence the perception of outcomes on the part of the partners, as well as the nature of the strategies they employ.
But what contributes to building up or breaking down trust? The research defines and analyses key factors and their contribution to trust build up, but also concludes that building trust is a complex process involving wide range of factors.
Finally it is clear that trust has its limits! The research reveals that there are circumstances in which risks are perceived as so extensive (particularly risks external to the project or political risks), that partners revert to opportunistic behaviour and exit the relationship. This is a rational decision, but breaks the moral code and causes a break in trust.