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The decision to adopt an innovation is seen as dependent upon the farmer's perception of: 1) the possible return from the innovation; and 2) the probability that that possibility will, indeed, be realized. The institution's role is to provide information concerning the innovation and facilitate the acquisition of any additional and/or new inputs which would be required to utilize the innovation. If the institution is perceived by the farmer as being unreliable, he will discount the information and the promise of additional inputs to be made by the institution. This, in turn, would lower the expected value to be received from adopting the innovation. It is possible that the farmer's distrust of the institution will be such that the expected value will be so low that adoption will not take place. The results of a study of small farmers in Cartagena, Costa Rica are reviewed. It is shown that there is a positive relationship between adoption of an innovation and trust in the institutions involved. This paper concludes that investments in improving institutional capabilities are advocated as they will lead to better institutional performances (increased adoption of practices by farmers).


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