Linking “multi-dimensions” of relational governance and opportunism in a collectivist culture

Abstract

Transaction costs between actors in projects funded by multilateral institutions are high. And according to the theory of transaction costs, this could be explained by the omnipresence of opportunism. At the same time, these projects, like non-international projects, are exposed to high risk and socio-political complexity, including cultural complexity: local lifestyles, institutions, politics, laws and regulations, customs, practices, norms, languages, time zones, holidays, processes, contracts, conflicts and resources. It may then be difficult to exclude that the reduction of these costs may depend in particular on trust and relational norms in a collectivist culture. This research therefore aims to explore the influence of relational norms and trust on opportunism and to examine collectivist culture as antecedent to these dimensions of relational governance. The study is based on primary data collected by questionnaire from 76 international development project coordinators in Burkina Faso (West Africa). The structural equation method based on the partial least squares approach was used to test our hypotheses. Our results show that of the two dimensions of relational governance, trust is the one that has a negative and significant influence on opportunism. Furthermore, it appears that collectivist culture has a negative indirect effect on opportunism through trust. Our results make an interesting contribution by showing that using the aggregated form of relational governance rather than specific dimensions provides an imperfect and over-simplified picture of reality.