3  Social Norms and Government Institutions

3.1  Social Norms

Social norms can be defined as informal “rules of the game” that regulate social interactions, thereby reducing transaction costs.[5] They are based on shared understandings amongst members of a group about actions that are desirable, merely permitted, or actively discouraged.

Norms can be society-wide or held by sub-groups – and, depending on the perspective adopted, can be positive or negative for well-being.

Social norms are sometimes seen as one amongst a larger set of mechanisms of social control (after Ellickson, 1991). Other forms of social control are economic incentives, customary law, and coercion through means of formal state institutions.

Fukuyama (2000a) has characterised social norms as originating in one of two intersecting dimensions: the first is along a hierarchical (e.g. organised religion) or spontaneous (e.g. arising from interactions in markets) dimension. The second is along a rational (e.g. common law) or a-rational (e.g. biologically grounded) dimension.

Norms often have a basis in shared cultural, religious or moral beliefs or practices that act to coordinate the expectations of individuals about the basis on which social interactions will occur. Norms are also often established by a dominant group as a means of promoting a pattern of behaviour that serves their interests.

Social norms are enforced by informal rewards and sanctions, and gain status through adherence over time. Sanctions may be self-imposed – as in the case of guilt felt by an individual who violates a norm to which they personally subscribe – or they may be imposed by members of a social group – as when an individual is shamed as a result of being seen by other group members to have violated an established norm. A further possible form of sanction is the imposition of a punishment on those who observe but do not themselves punish an infraction of an accepted norm (what Axelrod (1986) has termed a meta-norm).

In economic terms, social norms are one class of solutions to collective action problems. Because of their dependence on individuals’ willingness to incur the cost of imposing sanctions on non-compliers, however, social norms are themselves subject to collective action problems. That is, monitoring others’ behaviour and imposing sanctions involves personal costs, while the benefits are shared by all members of the group. This is a form of public good. It suggests that social norms will be more effective in small, close-knit groups where members have ready information on past and current actions of others in the group, and the ability to impose low-cost informal sanctions such as shame and reputational damage through means such as gossip.

Nevertheless, a considerable body of experimental evidence exists of behavioural regularities that suggest a willingness of people to cooperate in situations where their narrow self-interest would indicate that non-cooperation is rational. On this basis, and after in-depth empirical study of informal cooperation in the management of local common pool resources in a number of countries, Ostrom (2000) argues that a deep-seated norm of reciprocity exists across many societies. She defines reciprocity to mean that, in response to friendly actions people are frequently much nicer and much more cooperative than predicted by the rational self-interest model; and conversely, that in response to hostile actions they are nastier than might be predicted.

Ostrom argues that the norm of reciprocity (or conditional cooperation) is a fairly stable behavioural response exhibited by a portion of the population that can be relied on under certain circumstances. Citing extensive empirical evidence – for example, of small-scale irrigation schemes - she has put forward a number of design principles that contribute to successful self-organized local resource management regimes that regulate their activities through informal social norms. These include the presence of clear boundary rules defining who has rights to draw on the resource. The users of the resource design their own rules governing use of the resource. Individuals are more wiling to abide by rules where they have participated in their design, which means they are more likely to reflect shared concepts of fairness. Where rules on resource distribution are made by government agencies there is a lower level of compliance with the rules. That enforcement of the rules is by local users or people accountable to them. Recognition of the right to organise by a government authority, which helps the group to enforce the informal rules it creates and avoids the need to rely on unanimity as the decision rule. For larger resources (for example, a major irrigation water source), the presence of governance activities organized in multiple layers, each with its own distinct set of rules appropriate to the particular scale of activity concerned.