In courts we dont trust: Institutional Framework in the context of developing economy

In this paper, we examine with particular interest the mechanism of trust in Nigeria’s unique socio-economic landscape. This becomes pertinent as formalised institutional arrangements such as courts and legal structures appear to be underdeveloped. We theorise by drawing on the concept of institutional rivalry as it presupposes an understanding of alternative institutional forms operating in parallel to deficient formal institutions. Guided by the investigation of 36 exporting Nigerian SMEs, we reveal how entrepreneurs were found to rely on cultural specific relationships to address the limitations of weak and deficient state backed institutions. At its center, we describe how entrepreneurs relied on indigenous institutions such as ties to family and kinship, chieftaincy, religion and trade associations in resolving disputes during exporting. The findings reached in this study provide well founded and valid insights into the role of trust within Nigeria and other parts of Africa.