Inter-Personal Trust, Transaction Cost and Livelihood Success of the Members in Community-Based Organizations

This study attempted to study how interpersonal trust affects transaction costs and livelihood success of the members in community-based organizations (CBOs). Data were collected from 164 members of CBOs (76 from Samurdhi, 53 from Farmers’ Organizations, and 35 from Sanasa) selected from three Divisional Secretariate Divisions in Ratanapura District. The data were collected by a structured questionnaire having the face to face interviews and analyzed using Partial Least Squire Structural Equation Modeling. The results revealed that interpersonal trust has a negative influence on TC and it has a positive influence on the livelihood success of the members in CBOs. The results further confirmed that transaction costs play a mediator role in the relationship between interpersonal trust and the livelihood success of the members in CBOs. Thus, the study makes important contributions to the literature by providing empirical evidence related to the role of interpersonal trust on TC and the livelihood success of the members in CBOs.