This is a theoretical paper focusing on the mutual interdependence between formal and informal
processes in the interface between state apparatus and community in modern capitalistic and democratic societies. Simple and direct hierarchical control is no longer feasible or efficient. This problem is apparently solved by introducing complex and detailed audit systems. The correct way of reporting can become more important than the correct execution of tasks threatening established
informal relations of personal judgement and trust. Value rationality can be stifled by instrumental
procedures and values and in the end the universal value basis of a welfare society may be weakened.
Keywords: formal control, community, value rationality, trust