The modern world requires us to repose trust in many anonymous institutions. We strap ourselves in a flying tin can with two hundred other people not because we know the pilot but because we believe that airline travel is safe. Our trust in these institutions depends on two factors: skills and ethics. We expect that the people who run these institutions know what they are doing, that they build and operate machines that work as they are supposed and that they are looking out for our welfare even though we are strangers.

When one of these factors is weak or absent, trust breaks down and we either pay a high price in safety - as in the Bhopal tragedy - or a large 'welfare premium' such as the elaborate security measures at airports. Trust-deficient environments work in the favour of the rich and powerful, who can command premium treatment and afford welfare premiums. Poor people can command neither; which is why air travel is safer than train travel, which in turn is safer than walking by the road side.

Every modern society depends on the trust in the skills and ethics of a variety of institutions such as schools and colleges, hospital and markets. If we stopped believing in the expertise of our teachers, doctors and engineers, we will stop being a modern society.

As The Institution among institutions, it is the duty of the state to ensure that all other institutions meet their ethical obligations. The Indian state has failed in its regulatory role. Consequently, we cannot trust our schools to turn out good graduates, we cannot ensure that our colleges turn out well trained engineers and we cannot guarantee that our engineers will turn out good products.

A breakdown of institutional morals

Last year, I was invited to speak at an undergraduate research conference. Most of the participants in this conference were students at the best engineering colleges in Chennai. One student who was driving me back and forth recounted a story about the previous year's final exam. One of his papers had a question from a leading textbook to which the textbook's answer was wrong. The student was in a dilemma: should he write the (wrong) answer as given in the textbook or should he write the right answer using his own analytic skills. He decided to do the latter and received a zero on that question. Clearly, as the student had suspected, the examiners were looking at the textbook answer while correcting the exams instead of verifying its correctness.

As The Institution among institutions, it is the duty of the state to ensure that all other institutions meet their ethical obligations. The Indian state has failed in this regulatory role.

 •  Institutional order and disorder
 •  The nation as a person
 •  Privatisation of behaviour

The behaviour of these examiners is a breakdown of institutional morals, with consequences for the skills acquired by students. I say institutional morals, for the failure of these examiners is not a personal failure. At the same conference I met a whole range of college teachers, all of whom were drafted as examiners at some time or the other. Without exception, they were dedicated individuals who cared about the education and welfare of their students. However, when put in the institutional role of evaluating an anonymous individual, they fail in fulfilling their responsibilities.

When some of our best colleges are run in this fashion, is it any wonder that we turn out unskilled engineers and scientists? If, as we are led to expect, there is a vast increase in education at all levels and the regulatory regime is as weak as it is currently, isn't it likely that the trust deficit is only going to increase?

We are all aware of the consequences of ignoring corruption at all levels of society. While institutional failures in governance are obvious, I think the real problem lies deeper, in the failure of every day institutions that are quite apart from institutions that impinge on our lives only on rare occasions. It is true that our lives are made more miserable by government officials demanding bribes for all sorts of things, but what about the everyday lying and cheating and breaking of rules with people who are strangers?

Let me give you an example that many of us have experienced. I prefer buying my fruits and vegetables from roadside vendors rather than chain stores. To the vendor, I am probably an ideal customer, since I do not bargain and I do not take hours choosing the best pieces, instead, letting the vendor do the selecting. The market near my house is quite busy; as a result, most vendors are selling their wares to strangers. It takes a while before a particular vendor realises that I am a repeat customer. In such a situation trust is crucial. I have a simple rule: if a vendor palms off a bad piece whose defects are obvious, I never go back to that person again. It is amazing how often that happens.

In my opinion, the failure of institutional ethics is as much about these little abuses of trust as anything else. I call this the Giuliani effect, after the mayor of New York City who started his campaign to make the city safe by going after jaywalking and other petty infractions. Everyday thievery is like roadside trash; if you let it accumulate the whole neighbourhood stinks. What can we do to stop everyday institutional failure?

Stemming everyday failures

First, we have to understand the origins of trust in daily interactions. As far as I can tell, there are only two social mechanisms for achieving trust in everyday interactions: traditions and institutions. By tradition, I mean a historical lineage in which skills and norms are passed from generation to generation and reinforced by personal interactions between people in each generation. Guilds and castes are examples of traditions, where a weaver or priest learns his vocation by apprenticing with a master. Since teaching methods in a tradition are intensely personal, skills are transmitted directly, from teacher to student.

Since traditions aren't based on universal norms applicable to all, knowledge and morals are often transmitted via the means of a ritual structure that constrains behaviour. In modern India, we have mostly delegitimised the role of traditions. After all, caste traditions and other traditional forms of skill acquisition are as much means of exclusion as they are means of inclusion. In a society where skills should be accessible to all, we cannot take traditions as our model for the transmission of knowledge.

Note that these problems of tradition arise in traditional labour or retail markets as they do in traditional educational practices. In a traditional arrangement, it may happen that my family always buys its produce from your family or my family always employs members of your family for plucking its coconut trees. In a modern city and increasingly in our towns and villages, we buy and sell goods and receive services from strangers. Traditions are incompatible with anonymity.

One solution to the problematic character of traditions in the modern world is to create institutions that regulate anonymous interactions. We can replace traditional labour practices with employment contracts and traditional educational practices with entrance examinations. Rules replace rituals. Unfortunately rules are effective only to the extent people follow them in letter as well as in spirit. We Indians are bad at both. As my anecdote about the examiners in Chennai illustrated, Indians do well in personal interactions but often fail miserably when their institutional ethics are tested. I do not doubt that a widespread failure of institutional ethics will corrode the fabric of the nation. While debating how institutional ethics should be reformed, we can take one of three stances:

First, we can give up on modernisation, saying that traditional Indian ethics are superior to the impersonal ethics of the modern world. This view has many adherents, especially among groups that have traditionally held power. The political power of the Sangh Parivar derives from neo-traditionalism (even while the Sangh Parivar brand of Hinduism is very different from traditional practices). The second option is to go through a cultural revolution - as happened in China - where traditional practices are rejected wholesale in favour of a modern ideal of impersonal rules and neutral institutions. I doubt if this option is politically viable or desirable.

The third option is to realise that the conflict between tradition and modernity is itself an artefact of a historical period of modernisation when technology and social organization were incompatible with personalisation. What if the form of modernity in which impersonal rules dominate is better suited to the era of the railway and telegraph? I believe that the failure of institutional ethics in India has something to do with the conception of institutions as impersonal and rule governed, an idea which took root - to the extent it did - under the civilizing mission of colonial rule. Perhaps we need a new mechanism for creating trust, a mechanism that is neither traditional nor institutional.

Post-institutional technology

Consider the success of the cell phone: here is a quintessential 21st century technology that has caught on like fire in India. The cell phone is both personal and modern; it is a post-institutional technology. 21st century social networks are not institutions governed by universal rules; there is no expectation that everyone should think alike or have similar tastes. Instead, the successful social networks are information commons. There is no barrier to enter these networks (except for people who are too poor or unskilled to access the network as a whole, which is a serious problem, but different from traditional forms of exclusion). Information generated in these networks is accessible to everyone. In these networks, interaction is as much personal as it is anonymous.

I believe that these post-institutional technologies and post-institutional social networks are central to citizen led revival of trust in social interactions. The information generated and distributed by these technologies can be used by farmers to get the best prices, by voters to get information on their candidates and by residents to get data on pollution. I believe that thriving information commons and personalised social networks are key to the welfare of Indian citizens in the 21st century. Equally importantly, I believe that Indians will take to post-institutional technology faster and more skilfully than they did to the creation and sustenance of rule governed institutions.