Institutions Influencing Trust Development in Entrepreneurial Relationships in Africa

  • Isaac Oduro Amoako
Part of the Palgrave Studies of Entrepreneurship in Africa book series (PSEA)


This chapter draws on the literature and empirical data to present a framework that shows the institutions that provide the logics that influence trust development in entrepreneurial relationships in Africa. The framework shows the logics of indigenous cultural institutions that have their origins in African societies and enable trust development in entrepreneurial relationships. These cultural institutions run side by side with state and market institutions and may substitute for or complement the weak formal institutions to enhance trust development. Yet, there is very little knowledge and understanding of the processes through which the indigenous cultural institutions facilitate trust development in entrepreneurship in Africa. This chapter provides insights into the nature and role of indigenous institutions in entrepreneurial behaviour in Africa.


Africa Entrepreneurship Indigenous institutions Colonisation Culture 


  1. Acemoglu, D., and S. Johnson. 2003. Institutions, corporate governance. Corporate Governance and Capital Flows in a Global Economy 1: 32.Google Scholar
  2. Acemoglu, D., and J.A. Robinson. 2012. Why nations fail? The origins of power, prosperity, and poverty. New York: Crown Publishers.CrossRefGoogle Scholar
  3. African Development Bank Group. 2013. Championing inclusive growth across Africa: Recognizing Africa’s informal sector, Tunis.
  4. African Economic Outlook. 2017. Entrepreneurship and industrialisation, African Development Bank, OECD, United Nations Development Programme, Abidjan, Paris and New York.Google Scholar
  5. Agbodeka, F. 1992. An economic history of Ghana from the earliest times. Accra: Ghana Universities Press.Google Scholar
  6. Amin, S. 1972. Underdevelopment and dependence in Black Africa: Origins and contemporary forms. Journal of Modern African Studies 10 (4): 503–525.CrossRefGoogle Scholar
  7. Amoako, I.O. 2012. Trust in exporting relationships: The case of SMEs in Ghana, published PhD thesis, Center for Economic and Enterprise Development Research (CEEDR) Middlesex University, London,
  8. Amoako, I.O., and F. Lyon. 2014. We don’t deal with courts’: Cooperation and alternative institutions shaping exporting relationships of SMEs in Ghana. International Small Business Journal 32 (2): 117–139.CrossRefGoogle Scholar
  9. Amoako, I.O., and H. Matlay. 2015. Norms and trust-shaping relationships among food exporting SMEs in Ghana. International Journal of Entrepreneurship & Innovation 16 (2): 123–124.CrossRefGoogle Scholar
  10. Angeles, L., and A. Elizalde. 2017. Pre-colonial institutions and socioeconomic development: The case of Latin America. Journal of Development Economics 10 (124): 22–40. Scholar
  11. Ayittey, G.B.N. 1991. Indigenous African institutions. New York: Transnational Publishers.Google Scholar
  12. ———. 2006. Indigenous African institutions. second ed. Ardsley: Transnational Publishers.CrossRefGoogle Scholar
  13. Babalola, A.B. 2017. Ancient history of technology in West Africa: The indigenous glass/glass bead industry and the society in early Ile-Ife, Southwest Nigeria. Journal of Black Studies 48 (1). Scholar
  14. Becker, C. 1977. La Sénégambie à l’époque de la traite des esclaves. Revue Française d’Histoire d’Outre-Mer Paris 64 (235): 203–224.Google Scholar
  15. Biggs, T., and M.K. Shah. 2006. African SMES, networks, and manufacturing performance. Journal of Banking and Finance 30 (11): 2931–3256.CrossRefGoogle Scholar
  16. Bruton, G.D., D. Ahlstrom, and H.L. Li. 2010. Institutional theory and entrepreneurship: Where are we now and where do we need to move in the future? Entrepreneurship Theory and Practice 34 (3): 421–440.CrossRefGoogle Scholar
  17. Buame, S.K. 1996. Entrepreneurship: A contextual perspective: Discourses and praxis of entrepreneurial activities: Within the institutional context of Ghana. Lund: Lund University Press.Google Scholar
  18. Bujo, B. 1998. The ethical dimensions of community: The African model and the dialogue between North and South. Nairobi: Kolbe Press.Google Scholar
  19. Cruikshank, B. 1853. Eighteen years on the Gold Coast of Africa. Vol. 2. London: Hurst and Blacket.Google Scholar
  20. De Marees, P. 1987. Description and historical account of the Gold Kingdom of Guinea. Trans. A. V. Dantzigand and A. Jones. Oxford: Oxford University Press.Google Scholar
  21. De Witte, M. 2013. The electric touch machine miracle scam: Body, technology, and the (dis)authentication of the pentecostal supernatural. In Deus in machina: Religion, technology, and the things in between, ed. J. Stolow. New York: Fordham University Press.Google Scholar
  22. Delloitte. 2014. The Delloitte consumer review Africa: A 21st century view. London.Google Scholar
  23. Diop, Cheikh Anta. 1987. Black Africa: The economic and cultural basis for a federated state. Chicago: Chicago Review Press.Google Scholar
  24. Dondo, A., and M. Ngumo. 1998. Africa: Kenya. In Entrepreneurship: An international perspective, ed. A. Morrison. Oxford: Butterworth-Heinemann.Google Scholar
  25. Drakopoulou Dodd, S., and G. Gotsis. 2009. Enterprise values’ in the New Testament and antecedent works. International Journal of Entrepreneurship and Innovation 10 (2): 101–110.CrossRefGoogle Scholar
  26. Englebert, P. 2000. Pre-colonial institutions, post-colonial states, and economic development in tropical Africa. Political Research Quarterly 53: 7–36.CrossRefGoogle Scholar
  27. Estrin, S., and M. Prevezer. 2011. The role of informal institutions in corporate governance: Brazil, Russia, India, and China compared. Asia Pacific Journal of Management 28 (1): 41–67.CrossRefGoogle Scholar
  28. Estrin, S., J. Korosteleva, and T. Mickiewicz. 2013. Which institutions encourage entrepreneurial growth aspirations? Journal of Business Venturing 28: 564–580.CrossRefGoogle Scholar
  29. Fafchamps, M. 2004. Market institutions in Sub-Saharan Africa: Theory and evidence. Cambridge: MIT Press.Google Scholar
  30. Fallers, L. 1955. The predicament of the modern African chief: An instance from Uganda. American Anthropologist 57: 290–305.CrossRefGoogle Scholar
  31. Friedland, R., and R.R. Alford. 1991. Bringing society back in: Symbols, practices, and institutional contradictions. In The new institutionalism in organizational analysis, ed. W.W. Powell and P.J. DiMaggio, 17th ed., 232–263. Chicago: University of Chicago Press.Google Scholar
  32. Frimpong-Ansah, J.H. 1991. The Vampire state in Africa: The political economy of decline in Ghana. London: James Currey.Google Scholar
  33. George, G., J.N.O. Khayesi, and M.R.T. Haas. 2016. Bringing Africa in: Promising directions for management research. Academy of Management Journal 59 (2): 377–393.CrossRefGoogle Scholar
  34. Gyimah-Brempong, K. 2002. Corruption, economic growth, and income inequality in Africa. Economics of Governance, Spring 3: 183–209.CrossRefGoogle Scholar
  35. Heyman, C., and B. Lipietz. 1999. Corruption and development: Some perspectives. Pretoria: Institute for Security Studies, (40).Google Scholar
  36. Hyden, Goran. 1986. African social structure and economic development. In Strategies for African development, 52–80. Berkeley: University of California Press.Google Scholar
  37. Iliffe, J. 1983. The emergence of African capitalism. London: Macmillan.CrossRefGoogle Scholar
  38. Inikori, J.E. 2003. The struggle against the transatlantic slave trade: The role of the state. In Fighting the slave trade: West African strategies, ed. Sylviane A. Diouf, 170–198. Athens: Ohio University Press.Google Scholar
  39. Jackson, T. 2004. Management and change in Africa: A cross-cultural perspective. London: Routledge.CrossRefGoogle Scholar
  40. Jackson, T., K. Amaeshi, and S. Yavuz. 2008. Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya. Journal of World Business 43 (3): 400–416.CrossRefGoogle Scholar
  41. Kariuki, F. 2015. Conflict resolution by elders in Africa: Successes, challenges and opportunities. Alternative Dispute Resolution 3 (2): 30–53.Google Scholar
  42. Kea, R.A. 1982. Settlements, trade, and polities in the seventeenth century Gold Coast. Baltimore/London: The Johns Hopkins University Press.Google Scholar
  43. Kenyatta, J. 1965. Facing Mt. Kenya. New York: Vintage.Google Scholar
  44. Khayesi, J.N.O., A. Sserwanga, and R. Kiconco. 2017. Culture as facilitator and a barrier to entrepreneurship development in Uganda. In Entrepreneurship in Africa, ed. A. Akinyoade, T. Dietz, and C. Uche. Leiden: African Dynamics, Volume 15, Brill.Google Scholar
  45. Kiggundu, M. 2002. Entrepreneurs and entrepreneurship in Africa: What is known and needs to be done. Journal of Development Entrepreneurship 7: 239–258.Google Scholar
  46. Klein, H.S. 2010. The Atlantic slave trade. 2nd ed. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  47. Kuada, J. 2015. Entrepreneurship in Africa—A classifactory framework and a research agenda. African Journal of Economic and Management Studies 6 (2): 148–163.CrossRefGoogle Scholar
  48. Le Roux, J. 2000. The concept of ‘ubuntu’: Africa’s most important contribution to multicultural education? MulticulturalTeaching 18 (2): 43–46.Google Scholar
  49. Lyon, F. 2005. Managing co-operation: Trust and power in Ghanaian associations. Organization Studies 27 (1): 31–52.CrossRefGoogle Scholar
  50. Lyon, F., and G. Porter. 2009. Market institutions, trust, and norms: Exploring moral economies in Nigerian food systems. Cambridge Journal of Economics 33 (3): 903–929.CrossRefGoogle Scholar
  51. M’baye, B. 2006. The economic, political, and social impact of the Atlantic slave trade on Africa. European Legacy 11 (6): 607–622.CrossRefGoogle Scholar
  52. Mamdani, M. 1996. Citizen and subject: Contemporary Africa and the legacy of late Colonialism. Princeton: Princeton University Press.Google Scholar
  53. Mbigi, L. 1997. Ubuntu: The African dream in management. Randburg: Knowledge Resources.Google Scholar
  54. McTague, T. 2015. All MPs’ expenses receipts to be published after judges throw out bid to keep them secret, Mail Online, 28th April 2018.Google Scholar
  55. Murdock, G.P. 1967. Ethnographic atlas. Pittsburgh: University of Pittsburgh Press.Google Scholar
  56. Myers, L.J. 1992. Understanding an Afrocentric world view: Introduction to an optimal psychology. Dubuque: Kendall/Hunt.Google Scholar
  57. North, D.C. 1990. Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  58. Northrup, D. 1978. Trade without rulers: Pre-colonial economic development in South-Eastern Nigeria. Oxford: Clarendon Press.Google Scholar
  59. Nunn, Nathan, and Leonard Wantchekon. 2011. The slave trade and the origins of mistrust in Africa. American Economic Review 101 (7): 3221–3252.CrossRefGoogle Scholar
  60. Nwankwo, S., A. Gbadamosi, and S. Ojo. 2012. Religion, spirituality and entrepreneurship: The church as entrepreneurial space among British Africans. Society and Business Review 7 (2): 149–167.CrossRefGoogle Scholar
  61. Ogonda, R.T. and Ochieng W.R. 1992. “Land, natural and human resources, In W.R. Ochieng’ and R.M. Maxon Eds. An economic history of Kenya. Nairobi: East African Educational Publishers.Google Scholar
  62. Okpara, F.O. 2007. The value of creativity and innovation in entrepreneurship. Journal of Asia Entrepreneurship and Sustainability 3 (2): 1–14.Google Scholar
  63. Okrah, K.A. 2003. Nyasapo (the Wisdom Knot): Toward an African philosophy of education. New York: Routledge.Google Scholar
  64. Osei-Hwedie, K. and M.J. Rankopo. 2012. Indigenous conflict resolution in Africa: The case of Ghana and Botswana, IPSHU English Research Report Series, 29 (3), 33–51. Institute of Peace Studies, Hiroshima University.Google Scholar
  65. Perbi, A.A. 2004. A history of indigenous slavery in Ghana: From 15th to 19th century. Accra: Sub Saharan Publishers.Google Scholar
  66. Rehman, S., and M.A. Roomi. 2012. Gender and work-life balance: A phenomenological study of women entrepreneurs in Pakistan. Journal of Small Business and Enterprise Development 19 (2): 209–228.CrossRefGoogle Scholar
  67. Rodney, W. 1972. How Europe underdeveloped Africa. London: Bogle-L’Ouverture Publication.Google Scholar
  68. Sherry, John. 1983. Gift giving in anthropological perspective. Journal of Consumer Research 10: 157–168.CrossRefGoogle Scholar
  69. Sobel, R. 2008. Testing Baumol: Institutional quality and the productivity of entrepreneurship. Journal of Business Venturing 23: 641–655.CrossRefGoogle Scholar
  70. Spruyt, Hendrik. 1994. Institutional selection in international relations: State anarchy as order. International Organization 48 (Autumn): 527–557.CrossRefGoogle Scholar
  71. Thornton, P.H., and W. Ocasio. 2008. Institutional logic. In The sage handbook of organisational institutionalism, ed. R. Greenwood, C. Oliver, R. Suddaby, and K. Sahlin-Anderssson, 99–129. Thousand Oaks: Sage Publications.CrossRefGoogle Scholar
  72. Thornton, P.H., W. Ocasio, and M. Lounsbury. 2012. The institutional logics perspective: A new approach to culture, structure, and processes. Oxford: Oxford University Press.CrossRefGoogle Scholar
  73. Tillmar, M., and L. Lindkvist. 2007. Cooperation against all odds, finding reasons for trust where formal institutions fail. International Sociology 22 (3): 343–366.CrossRefGoogle Scholar
  74. Transparency International. 2017. Corruption Perception Index 2017. Berlin.Google Scholar
  75. Treisman, Daniel. 2000. The causes of corruption: A cross-national study. Journal of Public Economics 76 (3): 399–457.CrossRefGoogle Scholar
  76. Vickers, I., F. Lyon, L. Sepulveda, and C. McMullin. 2017. Public service innovation and multiple institutional logics: The case of hybrid social enterprises providers of health and wellbeing. Social Policy 48: 1755–1768.Google Scholar
  77. Wandiba, S. 1992. Craft and manufacturing industries, In W.R. Ochieng’ and R.M. Maxon Eds. An economic history of Kenya. Nairobi: East African Educational Publishers.Google Scholar
  78. Webb, J.J. 1999. On currency and credit in the Western Sahel. In Credit currencies and culture: African financial institutions in historical perspective, ed. E. Stiansen and J. Guyer, 38–55. Uppsala: Nordiska Afrikainstitutet.Google Scholar
  79. Welter, F., and D. Smallbone. 2006. Exploring the role of trust in entrepreneurial activity. Entrepreneurship Theory & Practice 30 (4): 465–475.CrossRefGoogle Scholar
  80. Welter, F., and F. Smallbone. 2011. Institutional perspectives on entrepreneurial behaviour in challenging environments. Journal of Small Business Management 49 (1): 107–125.CrossRefGoogle Scholar
  81. World Bank. 2017. Government effectiveness index, worldwide governance indicators. Washington, DC: The World Bank Group.Google Scholar
  82. World Bank Doing Business. 2018. Database accessed, May 2018.
  83. World Bank Enterprise Surveys. 2012. World Bank. Washington DC.
  84. Yanga, M.L., and I.O. Amoako. 2013. Legitimizing dishonesty in organizations: A survey of managers in four Sub-Sahara African countries. In (Dis)Honesty in management, Advanced series in management, ed. Tiia Vissak and Maaja Vadi, vol. 10, 243–268. Bingley: Emerald Group Publishing Limited.CrossRefGoogle Scholar
  85. Zoogah, D.B., and S. Nkomo. 2013. Management in Africa: Macro and micro perspectives. Management Research in Africa 53: 9.Google Scholar
  86. Zucker, L.G. 1986. Production of trust. Institutional sources of economic structure, 1840–1920. Research in Organisation Behaviour 8: 53–111.Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Isaac Oduro Amoako
    • 1
  1. 1.Liverpool Business SchoolLiverpool John Moores UniversityLiverpoolUK

Personalised recommendations