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Risk Management in Post Trust Societies
Ragnar Löfstedt
Palgrave Macmillan, 2005, ISBN 1-4039-4978-6, 165 pages, Price £50.00
This book is about risk communication in what the author refers to as “post-trust society”. Post–trust societies, largely western societies, have exhibited a dramatic fall in the trust that citizens accord to both industry and regulators. For example in the UK it is claimed that between 1974 and 1996 the public’s trust in these institutions fell from 39% to 22%. Similar falls have been recorded in Holland, Spain, Germany, Sweden and the USA. The cause of this phenomenon, Löfstedt argues, is the number and size of regulatory scandals that have occurred, particularly in Europe. Faced with the decline in trust it is becoming ever more difficult for regulators and industry to communicate risk related issues.
Löfstedt’s goal is to present the reader with a number of strategies for improving risk communication. In Chapter one of the book he starts by identifying the three dimensions of trust. Based on the work of Ortwin Renn, these are fairness, competence and efficiency. Each is examined in terms of the role that it plays in the risk management process. Chapter two then looks at how risk management is undertaken in practice. By taking as a framework Max Weber’s four “ideal types” of risk management (the political regulatory process, public deliberation, the technocratic/scientific perspective and risk management on strictly economic grounds) each is examined in detail and its history, strengths and weaknesses discussed.
Four case studies are presented in Chapters four to six. These case studies are a waste incinerator project in West Germany, a hydro dam re-licensing application in the USA, an incident at Barsebäck nuclear power station in Sweden and the disposal of the Brent Spar in the UK. Each is examined in terms of the trust factors that were at issue and the risk management process adopted by the regulator or company involved.
Finally, in Chapter seven of the book, Löfstedt draws these threads together and sets out what he refers to as a risk management decision tree. Using the risk management/trust framework and the case studies as exemplars Löfstedt identifies ways of communicating risk where the regulator or industry faces a deficiency in one or more dimensions of trust. For example, if the regulatory process is seen as unfair then a deliberative approach should be adopted. By deliberative is meant involving the public, regulators and interest groups in a discussion of the risks involved with the intent of agreeing a risk management framework or policy.
Löfstedt is the first to admit that risk management and communication are not exact sciences. Early on in the book he states that each risk management situation has its own characteristics and must be handled in the light of its individual characteristics. However, based on the case studies he presents guidelines on how to manage the process. Key to each approach is the need to conduct a qualitative study to determine where distrust exists and, based on these findings, to plan the best approach to secure a satisfactory outcome for all parties.
The book is well presented and, while requiring careful study and deliberation, can provide insights for both regulators and private organisations into how risk can be managed in order to secure satisfactory outcomes for all parties. One of the key strengths of this book is its focus on a detailed examination of the four case studies. By bringing theory and practice together in an accessible manner the author has shown how theoretical insights can inform practice. One reservation that the review has about this book is the price; a cheaper paperback edition need to be produced to make this accessible to a wider readership.
Ragnar Löfstedt is Professor and Director of the King’s Centre of Risk Management at King’s College London. Professor Löfstedt edits the Society for Risk Analysis’ (SRA) “Journal of Risk Research” and he was awarded the SRA’s Chauncey Starr Award in 2000, which honours an individual aged 40 or under who has made an exceptional contributions to the field of risk analysis.
Roger Shaw, City & Hackney Teaching Primary Care Trust
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