> Trust-by-default is pretty much the definition of social capital, which is thought to be incredibly important for a functioning society.
Not all societies are the same. Trust by default is a luxury in many parts of the world. Typically the rule of law is just non-existent in these places.
Every place around the world I've been to has been incredibly hospitable -- and the more besieged by war, or poverty, the more hospitable places tend to be. More so than your average street in the USA.
As a foreigner, the types of interactions you have may not be reflective of interactions that require high trust. Such as selling/purchasing land, dealing with police and crimes, paying for large amounts of labor such as in construction or ordering large amounts of supplies.
It's much easier to do business in the US/Europe, you can just put your credit card number in and stuff shows up at your door step, even if it's in the tens of thousands or more in value. Obviously, you can get taken in the modernized countries too, but much less and if you do there are legal avenues.
In poorer countries, you have to be a lot more careful who you deal with and need a lot of references because people have experiences getting burned too often. Any place that openly gives bribes to cops (I know tons, usually they are in poverty) also illustrate low trust. Hospitality doesn't display the deep trust that makes doing business in places like the US/Europe easier.
For personal reasons, I'm not going to be specific. I'm just going to say many parts of Asia; just not Japan. It's not perfect and there are probably better measures, but this map gives you an idea: https://en.wikipedia.org/wiki/Corruption_Perceptions_Index
As lotsofpulp has already mentioned, your experience will be drastically different if you're just visiting and if you're not a native. I lived in Asia and I'm also native. My family is still there, and I visit from time to time. If you haven't conducted business or dealt with law enforcement, it's hard to have a full picture; especially if you're just passing by.
"Functioning" implies some quality criteria beyond mere existence...
We don't look at a law of the jungle society and say "this is a functioning society" (even if technically it might be true: it does perform some functions).
I'm not going to categorize a war torn country that's in chaos as functioning. You can have a low trust society and still have a good economy as well as production
Not all societies are the same. Trust by default is a luxury in many parts of the world. Typically the rule of law is just non-existent in these places.