We like working with people we like. It is far more productive (and cheap) to be able to trust people to just crack on with things, than to put systems in place to monitor them. Tim Ferriss (author of 'The Four Hour Workweek') sings the praises of empowering people to make little decisions. You don't want to work for yourself. You want to outsource the work that distracts you from what you find fulfilling. For that to happen - you need to be able to trust each other. To be working for each other. Meritocracy is intended to replace hereditary entitlement. The problem is relationships are also hereditary. I am more likely to trust you if my friend trusts you. If we share some common ground. Nepotism and working with friends is a natural form of this inheritance. The only way to break this form of corruption is to build stronger networks of trust. Merit without trust isn't particularly valuable.