Can citizens trust government if falsehoods are part of the story?

Can citizens trust government if falsehoods are part of the story?
© Stefani Reynolds

While trust in government has been trending downward for decades, trust in the United States now appears to be in free fall as a host of half truths and outright lies become entrenched in our political system. Playing fast and loose with the facts has long been a hallmark of politicians, so why be concerned with the dubious logic flowing from Washington these days?

When the leader of the free world cannot be trusted as an authoritative source of information on critically important topics, the world, already a dangerous place where bad things can and do happen, becomes riskier. Consider what would happen if a pandemic, financial crisis, natural disaster, nuclear accident, cyberattack, or military conflict occurred. Economists study the likelihood and impacts of these consequential but low probability events, known as tail risks. Although they are unlikely, it is usually catastrophic when one of these extreme events strikes a nation.


A new form of risk, known as “tale” risk, is whether government officials are telling the truth. It is taking hold at a time when the potential severity of actual tail risks is growing. From a supply and demand perspective, there should not be much demand for lies, although voters in this era seem to tolerate and perhaps even demand some. For that reason, there always seems to be an ample supply of lies in the political realm. But it would appear that Americans are now experiencing a large surplus in falsehoods that are being stated to amplify fear and manipulate facts.

So how do we as a nation prepare for future tail risk events in the current context? How will we respond the next time that public officials tell us that we are in the midst of one of these unlikely but serious and dangerous events? Will citizens have any faith in the government when there is a deadly infectious disease spreading across the country like wildfire, but vaccines are being rationed and distributed as the government sees fit?

Will taxpayers stand for more Wall Street bailouts during the next financial crisis, particularly as some regulatory safeguards have been relaxed? What about a major cyberattack with the potential to disrupt, if not shut down, whole sectors of the economy? Would we listen to government directives and trust public officials to get us through it? Rallying the public for military conflict presently seems almost inconceivable. Consider all this before even thinking about the potential impact of climate change.

While there is no one solution to rebuild trust in government overnight, elected leaders and public officials need to redouble efforts to prepare for tail risk events. They must explore new paths to engage citizens in ways that embrace science, technology, innovation, and inclusion, which are essential ingredients for tail risk preparedness and tale risk avoidance.

The United States continues to remain the world leader in discovery and innovation. Notwithstanding the budget proposals to slash spending for science programs, public funding remains strong, while universities and other research institutions continue to supply the talent and insights needed to combat tail risks. Technology advances not only help identify and predict tail risks, but also enable the government to respond and engage with citizens in ways that leverage data and electronic resources to generate information and services needed when bad things happen.

Science and technology combine to foster innovation that can lead not only to rebuilding institutional trust but also to establishing new forms of trust. Modern data platforms and the intelligent machines they feed, along with democratizing forms of technology, such as crowdsourcing and blockchain, suggest a future better able to predict and respond to both tail risks and tale risks. The need to ensure equity is imperative.

Whether fortifying infrastructure or preparing for the next pandemic, the government must identify ways to care for all of its citizens regardless of socioeconomic status. Citizens must have trust and confidence that the government is inclusive when it matters most. Studying tail risks nearly always focuses on assessing downside risk. No one really worries about future outcomes that may turn out to be much better than expected.

As things stand in this era, however, the prospects for such unexpected positive outcomes are diminishing as downside risks continue to expand. We need to take every opportunity to embrace truth based on evidence and strengthen our ability to respond effectively to emergencies. If not, our nation may discover that the price of tall tales is so high it drives a societal bankruptcy tail risk from which it may be impossible to recover.

Douglas Criscitello is a senior lecturer and executive director of the Golub Center for Finance and Policy at the Massachusetts Institute of Technology.