What is unique about the diamond industry is not the importance of trust and reputation in commercial transactions, but rather the extent to which the industry is able to use reputation/social bonds at a cost low enough to create a system of private law enabling most transactions to be consummated and most contracts enforced completely outside the legal system.

XREF: Echoes research on private governance in other close-knit trading communities, and relates to the broader economics-of-trust literature on informal enforcement mechanisms.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 167