This, it turns out, is an important question, because there's a strong correlation between trust in government and overall prosperity (the above chart is via NZZ). The extreme examples of distrust are somewhat intuitive. If, for example, you don't believe that your government will uphold property rights, why would you ever want to risk investing in property?

But it can be even more subtle and insidious:

Trust is central to both stability and development. If citizens have trust in their system, they will be more likely to push for growth-promoting reforms. Moreover, they will be more confident that politicians will actually implement such reforms, and that sacrifices made today will pay off in the future. If this trust is lost, democracies become unstable, and autocratic tendencies are more likely to prevail. However, trust is also important for the transition from an autocracy geared solely toward the extraction of resources and wealth into a progressive democracy. A politically dominant class that governs autocratically will make concessions voluntarily and refrain from repression only if it trusts that it too will benefit from the institutional changes over the long term, and that it will not later be deprived of all opportunities.

All of this forms part of the work of economists Daron Acemoglu, Simon Johnson and James A. Robinson, who were awarded the Nobel Prize in Economics earlier this year. Their research explains why wealth is so unevenly distributed across the world. It's a problem of institutions. But it's also highly relevant to countries that are already rich.

Distrust is on the rise in countries like the UK (57%), France, (51%), Germany (49%), and Italy (47%). The outliers among OECD countries are places like Luxembourg and Switzerland. Only 25% of Swiss people express distrust in the government. That's a good thing for overall prosperity and it shows in their GDP. So how can we be more like the Swiss?

Radical transparency when it comes to decision making and more of a direct democracy (versus a representative democracy) are two places to start, according to the research. People, it seems, trust their government more when they themselves make more of the decisions.

Here's the full NZZ article. It's an illuminating read.

I was speaking with our lawyer in Park City this week, and he commented to me that he wouldn't be going into the office next week because Old Town would be too hectic with the Sundance Film Festival going on. His office is right on Main Street.

When small mountain towns host major international events, there are going to be spillover effects. This is true of Sundance in Park City (population ~8,500) and it is true of the World Economic Forum, which was hosted in Davos (population ~10,000) this past week.

Perhaps the most obvious impact is that people can rent out their homes for large sums of money. And so lots of people both do that and try to profit maximize while doing it. Here are some anecdotes from Davos (via NZZ):

Ten days before the WEF, there are still 25 listings on the Airbnb internet platform. The prices here range from 8,000 to 56,000 Swiss francs. The son of an apartment owner says that his family receives 12,000 francs a week for their three-room apartment, which is quite close to the convention center. However, he says he assumes that they could achieve significantly more. The family rents out the apartment through an intermediary.

Another interesting impact in Davos happens on the retail side (also via NZZ):

According to expert Robert Weinert, the average rent per square meter of retail space in Davos is 248 Swiss francs. A businessperson renting a storefront of 80 square meters must therefore pay almost 20,000 francs in rent per year. However, if that business vacates the store during the WEF, it can earn 60,000 francs – three times the annual rent for the facilities.

What this means is that some retail spaces remain vacant all year, just so that they can be available for when the WEF arrives and people need temporary commercial spaces. And why wouldn't this be the case: 20,000 francs for the year or 60,000 francs for a week. If I'm the landlord, I'll take the additional 40,000 francs and not think about the property for the rest of the year.

Of course, if you're trying to create a vibrant community with things, like, occupied retail spaces, then this isn't ideal.