Irrigation Infrastructure and Trust: Evidence From Natural and Lab-in-the-field Experiments in Rural Communities

Does irrigation infrastructure build trust, and how? To answer, this paper tests two processes of trust formation: particularized trust established through repeated interactions of rational individuals and generalized trust based on arational habits.

To find the causal relationship between farmers’ access to irrigation infrastructure and trust, an incentivized trust game was carried out with beneficiaries of an irrigated land settlement program in rural Sri Lanka. Land allocation under the program was arguably random. There were two main findings: First, trust among community members monotonically increases with duration of each farmer’s access to irrigation, regardless of social relationships. Second, the connection between irrigation access years and trust may not differ between in-group and out-group members. These findings suggest the relative significance of generalized trust formation via habits in irrigated communities, although possible particularized trust formation through repeated interactions cannot be ruled out. Because generalized trust is key to facilitating market transactions, the findings are particularly relevant when devising infrastructure investment policies in developing countries.

This paper is a part of a research project of JICA Ogata Sadako Research Institute for Peace and Development, titled “Effects of Irrigation on Poverty Reduction: The Case of Sri Lanka” in collaboration with the International Water Management Institute.