2.20           ndian      onom
           There is a growing literature24 in economics                over short periods of time. By this argument it is
     arguing that pro-social behaviour, which                          possible for a country to nurture and develop the
     includes altruism and trustworthiness, is innate to               kinds of social norms that enable a more vibrant
     human beings and, moreover, forms an essential                    economy.
     ingredient for the efficient functioning of                             In talking about a nation’s economic progress,
     economies. In other words, human beings have a                    all attention, including both praise and criticism, is
     natural ability to forego personal gains for the sake             usually focused on the government. It is, however,
     of other people or because that is what is required               important to recognise that much also depends on
     because of a promise the person had made. This                    civil society, the firms, the farmers and ordinary
     trait may well have evolutionary roots, but its                   citizens. The social norms and collective beliefs
     existence is now well demonstrated in laboratory                  that shape the behaviour of these agents play an
     tests by recent studies.                                          important role in how a nation performs.
                                                                             Honesty, punctuality, the propensity to keep
     vAlues AnD economics                                              promises, the attitude towards corruption are
     There is research25 in psychology and evolutionary                matters shaped in great part by norms, and social
     biology which shows that morality, altruism, and                  beliefs and the behaviour patterns can become
     other-regarding values are an innate part of the                  habitual. Moreover, in a democracy like India,
     human mind, even though the social setting in                     what can be done by government depends in great
     which a person lives can nurture or stunt these                   measure on how ordinary people think and what
     traits. However, the recognition that these human                 people believe in. That is what electoral politics
     and moral qualities can have a large impact                       is all about. An important reason why this got so
     on economic development came relatively late                      little attention in the past is because so much of
     to economics. Hence, the literature on this is                    traditional economics was written as if these non-
                                                                       economic facets of life did not matter. But we now
     relatively recent and brief. In fact, recent research
                                                                       know that a market economy cannot function if
     shows that having a few ‘good’ human beings in
                                                                       people are totally self serving. While self-interest
     society can give rise to dynamics through which
                                                                       is a major driver of economic growth, it is
     we end up with an overall better society. There is                important to recognise that honesty, integrity and
     also evidence that social norms and habits that at                trustworthiness constitute the cement that binds
     first sight seem ingrained in a society can change                society. At times economists treated these social
                                                                       norms, preferences and customs as unalterable.
       24.    Over half a dozen contemporary works have been cited     If that were so, there would not be much point
              as references by the Ministry of Finance, Economic
              Survey 2010–11, Government of India, N Delhi, p. 40.
                                                                       in analysing their effect. But we do know that
       25. Several recent literature have been quoted by the
                                                                       these qualities in a people can change. Honesty
              Economic Survey 2011-12, Ministry of Finance, GoI,       and integrity can be nurtured and aversion to
              N Delhi, p. 44:                                          corruption can be shored up.
               (i) F. Fukuyama, Trust: The Social Virtues and the            If these traits are absent or inadequate in a
                   Creation of Prosperity, Free Press, New York, 1996.
                                                                       nation, it is likely that that nation will stagnate and
              (ii) A. S. Guha, and B. Guha, ‘The Persistence
                   of Goodness’, Journal of Institutional and
                                                                       remain in a chaotic poverty trap. Take for instance,
                   Theoretical Economics, 2012.                        contracts which enable markets to develop and
             (iii) M. D. Hauser, Moral Minds, Harper Collins, New      form the basis of economic life. If the contractual
                   York, 2012.                                         system in a nation is so weak that when a bank
             (iv) T. Hashimoto, ‘Japanese Clocks and the History of    gives a 20-year mortgage to a person for buying a
                   Punctuality in Modern Japan’, East Asian Science,   house, there is high risk of default, the implication
                   Technology, and Society 2, 2008.