Why do we follow social norms? How have laws evolved from norms?

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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

2. 2
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. 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.

5. 5
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. 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. 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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10. 10
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.

11. 11
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.
ExternalisationInternalisation
Net
benefits
from
following
social
norms
Percentage of population

12. 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. 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.

14. 14
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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15. 15
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. 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. 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. 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. 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. 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. 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/