When social media feeds must be parsed for facts and lies, and when the regulatory requirements for brokers to honestly represent the financial interests of their clients are being rolled back, we must ask: Who can you trust, and how does your answer impact business decisions? On a recent business trip through the West African countries of Guinea, Cote d’Ivoire and Liberia, a common theme emerged: how the absence of trust in the residential real estate development sector there has hindered foreign investment and impeded economic growth.

I operate in a niche market — my company sells homes in West Africa primarily to West Africans living in Organisation for Economic Co-operation and Development (OECD) countries — but the impact of trust on business success and country-level economic growth holds broadly. A 2017 study of 23 industries across 43 countries, incorporating over 10,000 observations from 1990 to 2008, showed that country-level social trust is positively related to innovation and that this relationship is not trivial: A 15% increase in a country’s social trust is accompanied by a greater than 50% increase in innovation measures.

The interplay between trust and development is self-reinforcing. A 2015 study found that disparities in levels of trust and economic development among countries may lock some countries in a low-trust, low-development trap — while others that enjoy high trust and a high base level of economic development may be more resilient and thus able to retain higher levels of both trust and development on a permanent basis.


The trust theme plays out in real estate in West Africa via both interpersonal trust and trust in government institutions. For West Africans in the diaspora wishing to build a home in their native country, historically, the first step has been to buy land. To minimize travel cost and maximize land investment, many buyers would choose a “trusted” friend or relative to locate available land and send that person the funds for the purchase. Thus would begin a multi-year process of periodic funds transfers and periodic updates from the field, as the land was acquired, a wall built around it, a concrete slab foundation poured, concrete block walls raised, a roof installed and so on to project completion.

But, project completion rarely arrives. The process often breaks down at the initial stage of land acquisition due to poor government enforcement of land title claims and lack of criminal charges against fraudulent sellers. A buyer based in the U.S. might travel to West Africa to view their property, only to learn that their parcel of land was also sold to multiple other parties. Living thousands of miles away, diaspora buyers are at a disadvantage in pursuing a claim to the land in local courts and usually are forced to take a complete loss.








Even when the title is uncontested, problems arise. Many of the clients we work with come to us after having lost tens of thousands of dollars in real estate, because the friends or relatives they trusted to build their homes used the funds for some other purpose. It may take years to learn of the loss, because the funds’ recipients will regularly send pictures of an ongoing construction project to reassure the buyer that all is well. But, when the owner eventually travels to see the work, they find nothing but bare land.

West Africa has a critical need for housing stock and foreign investment. The West African diaspora currently sends more than $25 billion per year in remittances to the region, which is a fraction of what they might, in a high-trust environment, send to invest in home-building projects that can create jobs, infrastructure and wealth. But most are afraid to make this investment because they have lost trust — both in their friends and family to be good stewards of their funds and in the regional governments’ will to protect legitimate land claims.

At my company, we are engaged in an ongoing project to change this calculus. We know that, if people have a trusted partner to secure their land claim and build a quality home, diaspora investment funds will flow more freely into the region. Governments in the region that move to enforce land title regulations and protect the rights of diaspora investors will see an increase in investment. Early results from our projects in Guinea are promising, but much work remains to be done there and throughout West Africa.

What can businesses, governments and individuals do differently to foster trust, encourage innovation and spur sustainable economic development? A few lessons are clear:

1. Beware the vendor who tells you exactly what you want to hear and who quotes you a price well below market. If it sounds too good to be true, it is.

2. Beware the firm or individual who trades on access to political power rather than on value created through honest work. If someone is selling you a regulatory shortcut for a fee, you are dancing too close to (or across) some bright lines in the Foreign Corrupt Practices Act (FCPA). Securing business opportunities through the collaboration of those who have broken the public trust is not sustainable.

3. Beware the foreign investor whose only investment in your country is negotiated behind closed doors, paid for with funds they lend to your government under less-than-transparent terms, achieved using only labor and equipment from the investor’s country (not your own) and approved under terms that give the investor ownership of your nation’s infrastructure if your government fails to repay the loans. Imperialist overthrows throughout history have often started with a smile, a handshake and trust built through the exchange of shiny new objects. Plus ça change, plus c’est la même chose.