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SOCIAL NORMS AND LAW

Why do people follow law?

Law And Economics

Deepmala Pokhriyal ECO1207

M.A. Economics, Part I

Gokhale Institute Of Politics And Economics

2012-2014

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CONTENTS

Introduction ……………………………………………………………………...3 (Concepts of rationality and social norms,

relation between economics and implicit social norms)

Incentives to follow norms………………………………….........................6

(Explanations to why people generally follow rules,

different advantages and disadvantages of luring with norms)

Transforming social norms into law………………………………………….9

(some examples depicting need for transformation,

condition for internalisation of law,

working out a mathematical cost benefit analysis of conversion of norms

into law)

Importance of legal structure and law………………………………………14

(benefits of supplementing social norms with law,

ways of deterring wrongdoings(cost benefit analysis),

efficiency of law and factors affecting)

Example……………………………………………………………………………17

(dowry and the changing norm,

laws associated with dowry& their impact,

relation between the social norms of equality and laws to supplement it)

Conclusion………………………………………………………………………..19

(brief comment on norms and law and why people follow it largely

except for some who through punishments are deterred to do so)

Bibliography………………………………………………………………………21

3

INTRODUCTION

conomists and their analysis of various models of economics work on

the basic and most accepted assumption of individuals as rational and

self interested beings whose actions are a result of their tendency to

maximise their own satisfaction. But the analysts have never been able to

answer the prime question of whether these rational agents take into

account the welfare of others affected by their action or not. The greatest

economist, Adam Smith1 mentions homo sapiens as homo economicus and

views the behaviour of humans as rationally self interested, trying to

maximize the satisfaction in given time and resources.

At times what we call irrationality of others is rational behaviour in the

sense that it is consistent with their own goals and objectives, even when we

find it absurd and unreasonable. For example- many of us find drinking and

smoking not good for one‘s health and yet we meet people who enjoy it

knowing that it is harmful. So we might call their behaviour as nonsensical

but to them, their actions derive immense pleasure and therefore, it is

rational to them. But here, we don‘t try and justify what is good or bad for

people but only examine the different behaviours of individuals and answer

the question as to why they behave so differently.

The society is made of all kinds of humans depicting different kinds of

actions which for them are the best optimal behaviour. Also, the rational

behaviour of these individuals must not be called selfishness- an act without

worrying about others‘ interests. The theorem suggests that individuals if

left to themselves will lead to an efficient society by respecting each other‘s

endowments but to a certain extent is a mere assumption in real life.

Obviously no person will use a knife worth Rs 50 to steal from another

person flashing Rs 50000. Only a few sociopaths, who have no faith on the

social norms and will therefore, try to maximise such profits. Fortunately,

most of us do consider others to some extent; we want our actions to benefit

others, and try to do more good than harm. Thus, humanitarianism is not

an exception to self-interested behaviour. So we can conclude that the

society consists of different kinds of people who amongst themselves have

evolved a system of norms followed by a higher fraction of the society.

‗Like cows, social norms are easier to recognize than to define‘ (Basu 1998).

Social norms are the motley of informal, often unspoken rules, guides and

standards of behavior the authority for which is vague if not diffuse, and the

communal sanction for which can be swift and cutting. These nonlegal rules

1 The invisible hand described by Adam Smith in the famous book The Wealth of Nations shows

humans as rational beings who try to maximise their satisfaction and therefore collectively leads to efficient market outcomes without the involvement of any external agency.

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and obligations are followed and fulfilled in part because failure to do so

brings upon the transgressor such social sanctions as induced feelings of

guilt or shame, gossip, shunning, ostracism, and not infrequently, violence.

On a more definitional ground, Social norms are customary rules of behavior

that coordinate interactions among people. Once a particular way of doing

things becomes established as a rule, it continues in force because people

prefer to conform to the rule given the expectation that others are going to

conform. These social norms are a consensus of obligation to which the

members of the society agree to behave under certain conditions2. A

consensus is a uniform signal in any economic model by which the

individuals signal to do the same thing. Some norms are quite basic and do

not need proper enforcement techniques such as promising to reach back

home on time, eating properly and table etiquettes, behaving in a civilised

manner in public and many more. Also some norms are very important for

smooth functioning of the society like respecting contracts between parties

based on trust, not hurting others‘ for one‘s benefits, revenge and violence,

etc. Some commentators have several categories of social norms- rationality

limiting, preference changing and equilibrium changing norms3.

The society has thus, formed a basic structure of norms and certain

complex norms, important for a peaceful society are thereby left for the state

to implement. But the basic question still remains as the relation between

social norms and economics and the need to study them together. Dealing

with economic concepts, we very often come across various assumptions

and axioms which form the grounds for proving any model. These

assumptions at times have even been a matter of joke for economists and at

others, explained the theories better. Usually discussed explicitly like the

transitivity and convexity of preferences, rationality of behaviour, etc., they

are self concluding about economic models and inferences can be made

easily. But there do exist some presumptions which are very necessary for

any proof but are to be assumed implicitly. One such example is the

exchange theory where the individuals can exchange goods only if both are

willing to exchange at a price agreed by both. This is only possible if both 2 The definition of social norms is given by Robert Cooter in his paper Law from Order: Economic

Development and Jurisprudence of Social Norms (1997). 3. The categorization of these norms was given by Basu (1998) and cited in the paper Social Norms

and Law: Why People obey the law by Amir N. Lucit.

Rationality limiting norms are the ones where in one tries to help others in the society

thinking about the situation when fortunes reverse and thus the society in return will help him. It is rationality limiting since he might do it against his self interest.

Preference changing norms are social norms that could be held liable for manipulable or

perverse preference formation. Ex: Women are given lower status in society which is being accepted by all but more liberties will definitely make them better off.

Euillibrium changing norms solve the coordination problem and since everybody follows the

same rule, it is equllibrium achieving condition.

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the individuals respect each other‘s endowments and therefore do not try to

steal the other‘s possession through coercion. Therefore, we can say that

any exchange in the market is only possible if people follow the basic norms

of the society. Exchange would never take place accordingly other ways and

the economy will break down. Thus, social norms are always implicitly given

in economics and are a must for smooth functioning of the society.

So now since the question of what relates these norms to economics when

they are never talked about in economic models has been answered, we

further look into the deeper insights of social norms and try finding out how

and why not all, some norms are changed to law to follow. Also we know

that not all socially acceptable norms are efficient for all but then what gives

the people social and economic incentives to follow these legal regulations

and others the incentive to break the decorum of the society and what

punishments should the system set for breaking the norms and laws and

what levels and intensity of punishments should be attached to different

levels of breaking of norms are efficient for society and the people such that

they are deterred to wrongdoing. The basic model therefore works on the

cost benefit analysis of following social norms, their conversion to law and

encouragement to follow the set rules. Also game theory will be used to

explain the behaviour of individuals wherever necessary.

6

INCENTIVES TO FOLLOW SOCIAL NORMS

conomics is the study of incentives: how people get what they want or

need, especially when others‘ want the same thing. Its like a lever that

has astonishing powers to change a situation. The solution to the incentive

problems may not be that pretty- sometimes it involves coercion, violations

of civil liberties, penalties, etc.; an incentive is simply a means of urging

people to do more of a good thing than bad. But most incentives do not

come about organically. We as kids do not like vegetables though they ought

to have high nutrient content; but the mere incentive of nutrition will not

make kids swallow veggies.

There are three kinds of incentives: economic, moral and social. The social

norms established in the society are followed by the majority of the society

and are actually the basic pillar for its proper functioning. Norms play a

central role in the construction of social order. Norms define property rights,

that is, who is entitled to what. They determine what commodities are

accepted as money. They shape our sense of obligation to family and

community. They determine the meanings we attach to words. Indeed the

social norms are very effective for maximizing the welfare of people but what

actually makes them being followed for we know that even the actions are

best for the society, they might not be in each individual‘s welfare. Certainly

they are provided by incentives to follow and so they respect the norms. In

this section, we discuss the different sets of incentives which lure the people

to follow them even at times, against their will.

Some norms are self enforcing4. This happens when any compliance with

these rules reduces the private benefits and so the individual follows the

norms as they are advantageous to the party. If you don‘t follow the rules of

the game, you shall not be allowed to play it. So to enjoy the game, one must

abide by the rules and not cheat. If the expected gain from cheating in a

game of cricket is greater than the loss of never being able to play it again if

caught, then one might cheat but usually the costs of wrongdoing is higher

than benefits for such norms. Also the decision to follow norms depends

upon the type of regulation on them. If these rules are managed by a

stronger authority, the probability of not following them decreases.

Some norms are guided by emotions. We know that humans are driven by

various forms of emotions and many of their actions are a result of them.

From the olden days, the kings smuggled the princesses of other states just

to show their dignity and courage. Norms are followed in the social system

4 The various incentives to follow social norms have been given by Richard Posner in the paper Social

Norms and Law: An Economic Approach (1997).

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partly due to the fear of ostracism (the fear of getting excluded from society)

or the fear of revenge by others. The impulse to lash out in "blind rage"

against an aggressor, regardless of the balance of costs and benefits as they

appear when the victim must decide whether to retaliate, is the instinctive

response to the infringement of one's "rights" conceived as the fundamental

conditions for surviving and reproducing5. Also any act of inaction with the

norms might result in refusal of advantageous transactions and hence

provides incentives to go with the general norms and not violate them.

Some norms are only followed because they have been in the system for

years now and have become a part of the culture. The social norms are

consistent with cultural values of individual autonomy and egalitarianism.

Respecting elders is socially acceptable and the children respect their elders

because they have been brought up with such teachings. The behaviour

economics discusses the nature of humans as the behaviour of cattle in the

sense that they copy the actions of the majority and since the social norms

are desirable in the view of the society‘s members, they provide incentives

for others to follow.

The emotions of guilt and shame, exclusion, shunning, ostracism, violence,

etc provide normative incentives to follow the social norms. Kaplow and

Shavell in their model of moral rules and moral sentiments, similarly

assume that ―individuals are subject to a process of inculcation such that

they will experience guilt or virtue as a function of the choices they make...‖

At times, the norm is transformed as law only to induce people not to break

it as that leads to decline in society‘s welfare. An increase in esteem and

reputation in society, trust and advantageous cooperative behaviour are

rewards after being in sync with these rules and also provide incentives to

follow.

The book ‗Freakonomics‘ gives a good example of how people follow norms

even if it is against their will at times. The state of in US passed a law saying

the owners had to clean the poop of their pets in public areas like gardens

and parks. Some followed it because they thought of it as their responsibility

to keep the surroundings clean. Others followed it thinking not cleaning

poop will lead to shame and embarrassment if caught and others abide due

to the ‗cattle effect‘ of others following it. The rule breakers obviously found

paying fines and negative behaviour from rest of the society less costly than

cleaning their environment.

5 Robert Posner gives the argument that people generally follow the norms in order to survive in the

society as any compliance with them will lead to other’s getting offended and the feeling of revenge might put them in trouble. So to avoid the consequences of such actions, norms are followed.

8

Also, the conformity to a social norm is always conditional upon the

expectations of what the relevant others will do. We prefer to comply with

the norm on the basis of having certain expectations. To make this point

clear, think of the player who is facing a typical one-shot prisoner's dilemma

with an unknown opponent. Suppose the player knows a norm of

cooperation exists and is generally followed, but is uncertain as to whether

the opponent is a norm-follower. In this case, the player is facing the

following situation.

Here,

B= best option

S= second

T= third

W= worst

The best options

are played by

both only when

two individuals

trust each other

and cooperate.

Thus social

norms are

followed only when all cooperate and believe that others will also comply

with the rules

With probability p, the opponent is a norm-following type, and with

probability 1–p he is not (it is usually assumed that nature picks such types

with a given probability, but the probability may also be a subjective one).

Depending upon his assessment of p, a player will decide which game he is

playing, and act accordingly. Conditional preferences imply that having a

reason to be fair, reciprocate or cooperate in a given situation does not entail

having any general motive or disposition to be fair, reciprocate or cooperate

as such. Having conditional preferences means that one may follow a norm

in the presence of the relevant expectations, but disregard it in its absence.

Whether a norm is followed at a given time depends on the actual proportion

of followers, on the expectations of conditional followers about such

proportion, and on the combination of individual thresholds.

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TRANSFORMING SOCIAL NORMS INTO LAW

he study of social norms can be examined by the ways they influence

individual behaviour and shape people‘s intrinsic predispositions, how

these norms are formed and whether they are followed because of

internalisation in the system or persuasion. Social laws and laws both form

are the foundations of social order. Law and social norms have

complementary strengths as means to control the society. First, social

norms are vague, general principles which exist either due to culture,

historical importance or a general way of life. To illustrate, social norms are

imprecise about the obligations that smokers owe to non-smokers or the

appropriate sanction for a tax cheater. The existence of a law often

transforms a vague principle with an imprecise sanction into an explicit

obligation with a definite sanction. Second, citizens use all available

information, including gossip and rumour, when applying informal social

sanctions, whereas officials apply sanctions after a trial or hearing that

follows prescribed rules of evidence.

Third, compared to social norms, law can impose heavier punishments,

whose application involves more risk to the enforcer.

So the basic question is that which of the two is better for the society and its

welfare. Social norms though informal have less transaction costs and are

flexible where as law has the advantage of precision. The times when norms

fail to control harmful behaviour in society, is supplemented by legal rules.

Therefore, social norms and law go hand in hand and failure of norms on

their own leads to intervention and support by law.

Let‘s start the discussion with a few examples.

You and your friend have a bet on whether Barcelona or Manchester United

will win the next English Premier League. The one who loses the bet has to

give a Mercedes to the winner but the loser might not give him an actual

car.

TATA and Reliance Industries sign a contract dividing the shares of the two

companies in some proportion but the TATA group breaches the contract

and does not respect the pact.

Say you promise to come home early today and take your family for a movie

but fail to do so.

Now, the society says that breaking promises and hurting others is not good

and the people committing such wrongs should not be trusted. In the cases

given above, two parties promise each other for something and in all

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examples, one of the parties breaks the promise. The trust of the friend is

broken and same applies for the industrial group and the two might not get

into another promise ever again. Also the promise to reach home early is not

kept by the person. Though the cases are quite similar but they shall be

treated differently by the society and the law. The bet is just an informal

agreement between the friends and so is the promise of reaching home early.

Nobody will sue the person for breaking the promise and the society loses

nothing by probing in the matter, whereas for the contract between the

groups, the law will take stricter actions such that nobody else does the

same.

It must be noted that similar cases do not receive the same attention by the

society and therefore, there is a difference between the social norms and

laws germinating out of these norms. Now, we turn to the question of what

social norms and how should they be transformed into legal rules.

We know, obeying a norm often costs something in terms of money, time,

effort, unpleasantness, or risk. To illustrate, complying with tax law costs

money, cleaning up after a dog is unpleasant, shunning someone can be

risky, and forbearing from smoking may require effort. A person who has

internalized a norm is willing to sacrifice something to obey it. The cost

associated with the willingness to follow norms decreases as the number of

individuals following it increases. Thus, the social norm is internalised by

the individuals by the time the total costs reduce to zero. If the percentage of

such people in the society is very high, the informal norms play their role

without any legal supplement.

When the net benefits for a large population are greater than zero, the social

norms function properly and will automatically internalise itself in the

system. But if the net benefits are less than zero, i.e. the costs are greater

than the benefits received; the social norms are externalized and

incorporated into the system by the law and regulations. Therefore, it can be

said that the larger the fraction of society willing to accept a norm, lesser is

the need to back it by a formal legislation.

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But at times, even when the majority go with the given social norms, it is

important to support then with laws because the costs with incompliance

are so high and cannot be excused.

The diversion between them is basically due to the cost benefit analysis of

the problem which shows that if the benefit of converting a social norm into

legal rule is greater for the society, the law for the same is formed but if it

costs the State more than the benefits, the norm is left for the society to

implement on its own. For example: putting a board to stop trespassing in

an area is better than concreting the boundary of the area if the loss due to

trespassing is low. In the same way, it is better to safeguard the boundary of

a country with an army as the cost of intrusion is highest for national

security.

The cost benefit analysis of following norms and their transformation to law

can be done through mathematical modelling and is easier for

interpretation. For an individual, the costs and benefits derived out of an

action show if its worth doing or not. If the costs in terms of before the

action has been taken or in the consequences of the actions outweighs the

benefits derived out of it, a rational individual might not commit the action.

In layman‘s language, say the cost of going to a movie is the price of the

ticket, meal and the deduction in salary for a day‘s leave, be it Rs 200 + Rs

100+ Rs 700= Rs 1000 and the worth of watching a first day first show

Salman Khan movie is greater than Rs 1000 for you, then one shall opt for

going for it.

If the total costs exceed the total benefit: actions are undertaken.

If the total costs are less than total benefits: actions are not undertaken.

Externalisation Internalisation

Net

benefits

from

following

social

norms

Percentage of population

12

Similarly, analysing the costs and benefits associated with following norms

and law determines whether norms should be followed and should they be

transformed into law. The cost associated with the transformation into law

includes:

Cost of enforcement and implementation of law

Costs associated with any non abidance of law and punishments

Costs of decrease in social welfare(if applicable)

Other associated costs

The benefits attached to the transformation of norms into legal laws are as

follows:

Benefits with increased welfare in society

Benefits of safety and peace

Benefits of obedience of laws

Other benefits

Now, any conversion and emergence of social norms is decided on the basis

of costs and benefits of the transformation. If the total costs are more than

the benefits accrued, the change is made.

costs

Price

Benefits

Degree of law

The costs curve is upward sloping as when the number of laws in society,

the cost of enforcement rises. Also, the benefit curve is downward sloping

because the per increase in number of laws increases the benefits

associated with it partially. The marginal costs are positive and the marginal

13

benefits are negative in nature. The optimal level of law in the society is

when the costs of any transformation equals the benefits derived from it.

Thus, some social norms are absorbed in the system and do not require

external assistance but some have to be supported by rules and regulations

made by the legal system of the society. The rules thus formed are basically

to reduce the costs to the society and maintain its decorum and peace. The

transformation deters the individuals to go against the established norms

and laws. This transformation and conversion to law is done by an external

agent, basically the government who acts as the parent and decides what is

good for the society and thereby constructs rules and regulations. This is

termed as paternalism.

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IMPORTANCE OF LAW

he social norms are implicitly present in every society as no society can

run and function without an inbuilt system of understanding and

coordination between its citizens. But they are never expressed explicitly

and thus the need for law arises. The social norms are supported by law if

the adherence to norms is low but very important for efficient working of the

society. Thus as seen in the previous section, support by law is very crucial.

It leads to increase in the proper functioning of the society. It also helps in

deterring wrongdoings and thus helps in making of a peaceful society.

We know, law is an obligation backed by a sanction. When the law arises

out of the need to supplement social norms, it can use legal sanctions to go

with social sanctions.

For example: fines for breaking traffic rules with the shame and

embarrassment; imprisonment and penalties for cheating and tax evasion

with bad publicity. This basically adds to the total cost for any person not

following rules designed by and for the society. In other words,

supplementing the state sanctions with the social sanctions increases the

total sanction. Also the net cost for implementation of the norm is reduced

as one rule can be spread over the whole society.

So we now discuss why and where is law important for the society even

when there is the presence of social norms which are complied to.

1. Increases the total cost to offenders

As discussed earlier, individuals are rational and decide on every action

taking into consideration the pros and cons of it. If the benefits derived out

of any action are greater than the costs associated, the course of action is

undertaken. Therefore, for any offender say a burglar, the benefit after a

robbery is Rs 30,000 and the cost associated is only shame and

embarrassment after being caught(assuming no law against robbery). Let us

give a monetary value to it, say Rs 10,000. Then he would obviously

undertake the robbery and gain a net benefit of Rs 20,000. If there exists

law saying any theft will lead to imprisonment of 1 year and a fine of 20,000.

Now the total costs increase to (10,000 + 20,000 + 10,0006) = 40,000. Since

the costs outweigh the benefits, the robbery will not take place.

So we say that attaching a legal sanction to social norms increases the value

of any offence and thus deters any wrongdoing in the society.

6 This is the monetary value which the burglar will lose for spending an year in jail. It is the

opportunity cost for him.

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costs for

offenders

number of offences

The total costs associated with norm breaking increase with legal

supplement and thus, the level of offences decline.

2. Costs associated with implementation declines

The basic concept of economies of scale comes into play here. As the law is

spread over the whole society, the per person cost of implementation

declines drastically and therefore, the people will have an incentive to check

for any wrongdoing. This is done in the following way:

Say the cost associated with looking for any disturbance in the society is

individual and he has to take actions against it all by himself. So the

probability of him undertaking any such action is low. But when the law

plays its part and acts as an administrator and onlooker for incompliance

with norms, the costs per person declines and leads to better

implementation.

A paper by Robert D. Cooter7 explains two ways by which the state can

enforce law and at the same time, the citizens also abide by them. He uses

two methods: cheap and expensive talk. Cheap talk by the government only

changes the expectations of the people and does not include any change in

the payoffs for them, where as expensive talk such as contracting,

disclosing, or distorting, changes the schedule of payoffs attached to

different actions. For instance, breach of contract triggers damages,

inaccurate disclosure risks liability, and extortion provokes criminal

punishment. It‘s the credibility of cheap talk which leads to adherence or

else the expensive talks are done in form of stricter laws.

But the level of efficiency by law and regulations depends greatly on the

credibility of legal actions and enforcement promises by the state. The

7 The paper is Three Effects of Social Norms On Law: Expression, deterrence and internalization

published under the Berkeley Law Scholarship Repository in the year 2000.

16

effectiveness of law depends on how well the state can influence the ideas

and thinking of its citizens. If the people believe that the laws are strict and

the government is expressive enough about the law it passes, the level of

compliance is to rise greatly. For example: in the example of the burglar, if

the probability of getting caught is very less, say 10%. Then the total costs

now change to (10,000 + {20,000 + 10,000}*0.1) = Rs 13,0008. The benefits

now are greater than the costs and so the burglar undertakes the robbery

and has a net benefit of (30,000 – 13,000) = 17,000. Also we see that when

the probability of getting caught was 100%, no robbery was done.

The expressiveness on behalf of the state as how they handle the laws made

and the level of seriousness amongst them also decides the magnitude of

compliance. To explain this, we can refer to the anti tobacco law in India.

The country can under the WHO Framework Convention in Feb, 2004 and

smoking was banned in public places from Oct 2, 2008. Its effectiveness can

be concluded form an excerpt in TOI

―…smokers may feel discriminated against

whenever they see a no smoking board but India is still

a haven for them. The Anti Tobacco Drive in India is far

from being effective and little has been done to implement

the directives..‖

Such an impact of law can be blamed on the inefficiency of the state which

fails to regulate and enforce the laws made properly. The laws therefore can

only supplement the social norms if the state and its actions are credible. So

to say that social norms supported by law are the best for the society is

incorrect and this process should only be undertaken when the effectiveness

on part of both the parties (state and public) is higher.

8 The probability of getting caught is 0.10 and the expected punishment under law is therefore

(20,000 + 10000)*0.10 = 13,000.

17

AN EXAMPLE TO ILLUSTRATE

he institution of marriage is India is deemed essential for everybody and

is the most respected activity in the society. For the individual, marriage

is the great watershed in life, marking the transition to adulthood.

Generally, this transition, like everything else in India, depends little upon

individual volition but instead occurs as a result of the efforts of many

people. With the inception of the society and the practice of marriage, dowry

(dahej in Hindi) has been an inseparable part of it. It consists of is the

payment in cash or some kind of gifts given to bridegroom's family along

with the bride. Generally they include cash, jewellery, electrical appliances,

furniture, bedding, crockery, utensils and other household items that help

the newly-wed set up her home. It has been a norm in the society and was

much appreciated earlier as it was voluntary and the function of a dowry

may be to provide the husband with seed money or property for the

establishment of a new household and to help feed and protect the family.

But over the time the meaning of dowry has changed and is converting into

a social evil. The social norm of gifting the bride with necessities to help her

establish her new life has turned into a business to seek money and other

valuable assets in the name of marriage. The condition has worsened so

much that in spite of the fact that the society rejects it and condemns such

acts, the law had to supplement it with legal sanctions. The shame and

embarrassment associated with asking for money from the bride‘s family is

not enough to stop the evil practice and therefore, the state had to make

stricter laws. This has increased the costs of such actions and the fear of

law has helped reduce it (though not fully).

In India, there are civil laws, criminal laws and special legislative acts

against the tradition of Dowry. The Dowry Prohibition Act, 1961under civil

law in India has prohibited any request, payments and acceptance of dowry

under the institution of marriage. Asking or giving of dowry can be punished

by an imprisonment of up to six months, or a fine of up to Rs. 15000 or the

amount of dowry whichever is higher and imprisonment up to 5 years. Also

IPC section 406, 304B, 498A are reserved for the jurisdiction of dowry law.

Thus laws have been made to support the social norm of dowry being an

evil.

But as it has been already discussed that mere presence of laws parallel to

norms does not lead to an efficient society outcome. This, in case of dowry in

India can be seen from the fact that there were 8,391 reported cases of

dowry deaths in 2010. That is just under double the number of cases

registered in 1995 — 4,648 cases. Statistics tell a story, but not the whole

T

18

story. For every dowry death reported, there must be dozens that go

unreported. Of the 8,391 reported cases in 2010, although 93.2 per cent

were charge-sheeted, the conviction rate was a miserable 33.6 per cent.

Despite a 1989 amendment to Section 304B of the Indian Penal Code (IPC),

shifting the burden of proof to the husband and his family, the process of

getting a conviction remains fraught because of loopholes in the law and the

inability of the victim's family to establish the link between dowry demands

and the death. Often, it is impossible to take the declaration of the exploited,

as the victim is barely alive. Even when it is taken, the police handling is

shoddy and careless, allowing a clever defence to tear it apart during trial.

So the ineffectiveness on the part of law has resulted in laws just being legal

papers and unenforced. The problem can be cut down from its roots by a

combination of stronger social norms and efficient, credible laws.

Inculcating the thought that dowry in any form is bad for the society and

should be condemned with amendments in laws, making them more rigid

and rigorous such that incompliance is reduced to the bare minimum.

Also being a chauvinist society we live in, the instances of harassment of

women, minorities, and other unprivileged sections domestically, at work

places and even in public are enormous. Though we are taught equality in

race, creed, sex and religion; there are many instances of exploitation of the

weaker sections. The women are physically and mentally tortured by the

males of the society, even when the lessons of gender equality are preached

everywhere. So since the social norm of respecting all individuals‘ integrity

has to be complemented with laws to strengthen it. Examples of many such

laws are National Commission for Minorities Act, National Commission

for Protection of Child Rights (NCPCR), Protection of Women Against

Domestic Violence Act, Child Protection and Development Act, etc. These

laws have actually increased the costs of any disobedience as the

punishments with them are stringent and tight.

The examples of social norms being supported with laws are numerous from

breaking rules and getting penalised to committing homicide and landing in

the jail. The most important point we have made here is that social norms

are very effective at a small scale but at places where it fails, laws come for

rescue and help in running the society smoothly.

19

CONCLUSION

Through the time with evolution of society and organisation of individuals in

associations, rules and regulations have made it work well and the

discipline has increased its efficiency as a unit. Being an intrinsic part of the

system, these rules have also evolved with time and play a very crucial role

in defining the society. Norms, as defined by the dictionary are standard

pattern of social behaviour which governs how a society functions. These

might not be formally written or defined but are followed by the individuals.

The significance of the idea of social norms has even been explained by

Adam Smith; he extols social norms for promotion of different roles in the

society and creation of trust amongst people leading to specialisation. Also

the efficiency of society economically is based on such norms and thus the

theory of production, exchange and distribution are viable9. So even when

not declared as an assumption for completion of any economic activity,

social norms have been acting as one of the strongest pillars of economics.

The oldest norm is the ‗tit for tat‘ rule which says that do not do to others

what you don‘t want to be done to yourself. This rule holds its strength in

the fact that people behave properly and abide to maintain peace in the

society because the conscious mind knows that any wrongdoing can cause a

similar action onto them. So if the society is left to itself, it can work without

a third party; but there are certain norms whose incompliance has wretched

effects and the society‘s way of handling them is inappropriate in the sense

that it does not reduce it to lower levels in the future. So the state or any

external agency acting on behalf of the society can take decisions for the

good- this is termed as paternalism. Social norms are specified behaviour for

the major part of the society and any violation leads to at least informal

disapproval. When the informal ways of handling are not enough, legal

regulations make it ideal to abide with these norms.

The modern day law has been formulated in a way that it runs parallel with

the social norms. No law works on principles which go against the society.

There is no law which says beating up somebody you don‘t like is fair just

because you don‘t like the other person; law enforcement comes along the

lines of norms established in the world. The rule of law is basically a social

norm which connects the formal institutions with the informal ones. Law

also comes into existence because people have a greater share of respect for

law. ‗Follow it because the law says so‘ is the psychology of many in the

society and thus legal framework plays its part very effectively.

9 The theory of production, exchange and distribution is based on the assumption that people are

endowed with certain assets that are used by them to produce goods and then exchange them

voluntarily in the market. This is only possible if the endowments of all are respected and no interference is done with the activities of others. The socially followed norm says that the privacy and integrity of others’ should not be hurt.

20

The interaction between the laws and social norms must be socially and

systematically consistent. This general hypothesis of systemic consistency in

turn yields two more specific hypotheses10:

(H1) Content consistency – The content meaning of social norms and legal

rules is conceptually compatible.

(H2) Functional consistency – The role law plays in social regulation is

conceptually compatible with the informal normative environment.

Hypothesis H2 on functional consistency addresses the most fundamental

question about social norms and the law – the relations between the content

of the law (―law on the books‖) and compliance with the law (―law in action‖).

It states that the laws are complied with only when the legal setting on

paper is conducive to the social setting. In a nutshell, it talks about the

interaction between both in a way that complements each other.

Also, the theory of norms and law has some practical implications for

economic development. In a developing economy with relatively free trade,

business will develops efficient norms to regulate private interactions. In

these circumstances, the role of state law can be limited to correcting

failures in the market for norms. Failures tend to occur because private,

informal punishment insufficiently deters wrongdoing. In these

circumstances, state enforcement of social norms can increase private

cooperation and production. Contracts and written documents proving

production and exchange lead to an increase in their efficiency as they law

takes care of the unfavourable outcomes.

In the paper, we try and see how the law makers find out certain community

norms, test them and pass them as laws for the society. A law is developed

from social norms only if it possesses an appropriate incentive structure to

follow. Law attaches a sanction to a violation of a good norm when the

private benefits of violation are great or the private costs (whether in loss of

advantageous transactions or in guilt) are slight, so that not everyone obeys

the norm all the time, and where in addition the violation inflicts substantial

social costs. Unless both conditions are satisfied, the benefits of the legal

sanction are unlikely to exceed the costs of legal regulation. Thus the law

penalizes murder, but not rudeness.

10

Given and stated in Roland(2004). The two hypothesis are also referred to as Williamson 1 and 2.

21

BIBLIOGRAPHY

Books

Law From Order: Economic Development and the Jurisprudence

of Social Norms by Robert Cooter (1997)

Social Norms and the Law: An Economic Approach by Richard

Posner (JSTOR, 1997)

Three Effects of Social Norms on Law: Expression, Deterrence,

and Internalization by Robert Cooter (2000)

Social Norms & Law: An Introduction by Patrick S. O‘Donnell

(Theory and Science, 2007)

Social Norms and the Law: Why Peoples Obey the Law by Amir

N. Licht

The Role Of Norms And Law In Economics: An Essay On Political

Economy by Kaushik Basu (2000)

The Theory Of Public Enforcement Of Law By A. Mitchell

Polinsky & Steven Shavell (2005)

Legal Error, Litigation, and the Incentive to Obey the Law by

Polinsky and Shavell (JSTOR)

Internet Sites

en.wikipedia.org

www.treasury.govt.nz

www.timesofindia.indiatimes.com

http://www.sableverity.com/why-do-people-break-the-law/