In her famous 1992 study of networked relationships in entrepreneurial settings, entrepreneurship professor Andrea Larson (University of Virginia), observed how network form of governance highlight ‘reputation, trust, reciprocity and mutual interdependence, and how social control is one of the possible governance mechanisms of network organizational forms.
As it is well-known, networks are a governance mechanism that provides an alternative to both markets and hierarchies. While markets – at least in their most abstract conceptualization – are limited to the private sector, and hierarchies are confined to the public sector, networks span across the public, private, and voluntary sectors. If hierarchies are governed through administrative orders, and markets are coordinated through competition and prices, networks are governed through mechanisms based on trust.
Professor Larson’s words were echoed during the current session of the National People’s Congress by Jian Qin (简勤) and Li Xia (李霞 ), respectively the CEO of China Mobile Guangdong, and the deputy director of Anhui Academy of Social Sciences.
According to CCtime, Jian Qin stated how
The market economy is an economy based on trust, and the social credit system is an important systemic arrangement of the market economy. The construction of a credit reporting system is an important component of the construction of the national credit information system, and accelerating legislation on credit reporting is necessary.
Jian Qin observed how the social credit system still lacks its ‘backbone’, and filed a Legislative Draft on Credit Reporting. In his views, the developmental needs of the social credit system and big data can best be served by a national level law specifying how personal information can be collected, how big data and credit information are to be managed, exchanged across platforms, and how the personal information of citizens is to be protected. In fact, Jian explained, legislative guarantees on the the protection of the rights and interests of the subjects of credit information, on the privacy of citizens and on information security are still lacking.
The theme of trust was explicitly raised by Li Xia, who observed how trust is one of the twelve socialist core values. This value is important as nowadays the indicators of social trust show a negative trend, and social governance and governing capability should be strengthened on the basis of social trust. Li Xia proposed to construct a social credit system through the strengthening of relevant mechanisms and systems, such as a mechanism to share social credit information. Li suggested to adopt concrete measures to provide guidance and constraints to users, educating them in the good practices relevant to the social credit system. Consumers, she suggested, should gain a greater awareness of self-regulation, and make reasonable and lawful consumption choices, through the guidance of the public opinion, and a set of constraints provided by the government. At the same time, social organizations can be mobilized to contribute in the protection of relevant markets.