Growth, Development and Happiness 2.19
cycle—finding ways to break this cycle could friendly social qualities are acquired is not yet
increase the well-being of marginalised individuals fully understood. Fortunately, the new discipline
enormously. of behavioural economics is beginning to give us
some insights into the formation of customs and
sociAl norms, culture AnD DeveloPment behaviour:23
Economic development is not only dependent on It is, for instance, known that buildings
fiscal policy, monetary policy and taxation, but and office spaces which are cleaner and
is also rooted in human psychology, sociology, aesthetically better maintained result
culture and norms. In economics, there has been in individuals being more honest and
a bit of resistance in emphasising other aspects desisting corrupt activity. It is almost as
of development, because it is thought of giving if we have a mental inclination not to
ground to the neighbouring disciplines.22 The
defile a good ambience through acts of
recent World Development Report (WDR) of 2015
corruption.
focuses on the behavioural and social foundations
of development, and has been very well received. New York city’s notorious high crime
was controlled, among other things,
Government documents (generally, hard-
by cleaning up the city and removing
nosed), usually, make no mention of the role of
graffiti from the walls. New York’s police
social norms and culture in promoting development
department took a decision to deter
and economic efficiency. However, there is now
vandalism and graffiti that scar public
a growing body of literature that demonstrates
spaces. This act of making the cityscape
how certain social norms and cultural practices
more aesthetic somehow made potential
are vital ingredients for economic efficiency and
criminals less prone to crime.
growth. Groups and societies that are known to
be honest and trustworthy tend to do better than One sees casual evidence of this in the
societies that do not have this reputation. There behaviour of Delhites using the metro. It
have been broad cross-country studies and also has been widely noted that people behave
laboratory experiments that illustrate this. More better when they travel on Delhi’s well-
generally, what is being argued is that a nation’s maintained metro (postponing their bad
success depends of course on its resources, human behaviour to when they come up to the
capital and economic policies, for instance fiscal surface again, some would add).
and monetary policies, but also on the cultural All this is in keeping with the influential broken
and social norms that permeate the society. windows theory in sociology, which maintains
Societies that are endowed with personal integrity that, if we control low level, anti-social behaviour
and trustworthiness have the natural advantage, and take small steps to improve the environment,
in that no third party is required to enforce this will have a natural deterrent effect on larger
contracts. For outsiders the mere knowledge that criminal behaviour and acts of corruption. Also,
a particular society is trustworthy is reason to do the sheer recognition and awareness that some
more business and trade with it. One reason why collective qualities of citizens, such as honesty and
these ‘social’ causes of development do not get trustworthiness, enable the entire society to do
enough recognition in the literature on economic well, prompts individuals to adopt those qualities
policy is that the science of how these economics- and overcome the ubiquitous free-rider problem.
22. Kaushik Basu, Chief Economist, World Bank, Livemint, 23. Ministry of Finance, Economic Survey 2009–10,
N. Delhi, 3 February, 2015. Government of India, N Delhi, pp. 34–35.