Growth, Development and Happiness 2.21
of this is not that banks in that country will make It is not known precisely how these values
large losses. The implication is that banks will not can be inculcated in society. But, hopefully,
give loans; and the housing market will remain writing about their importance will catalyse
severely underdeveloped and the total number of change, as ordinary people realise that for
houses will be few and far between. economic advancement these social qualities are as
Enforcing complicated or large contracts, important as policies that concern directly with
especially ones protracted over a long period of the economy—like operating the stock market or
time, is the responsibility of the state. The state setting the rules of market competition.
provides the laws and enforcement to enable Further, basic literacy and better education
people to sign contracts. However, economic life are helpful since people can then, on their own,
is full of everyday ‘contracts’ (for example, you let reason and reach these conclusions. Literacy has
me ride in your taxi, and I will pay you at the the added value that it implies ordinary people
end of it; I pay you money now and you paint will demand policies which are truly better,
my house over the next two days; or you paint rather than those that merely look good on the
my house over the next two days and I will pay surface. In a democratic setting like India, this
you after that). In these everyday situations it is will incentivise politicians to adopt better policies.
too cumbersome to bring in the state or the law Finally, if political leaders and policymakers act as
courts. Here the main guarantor has to be the role models in terms of these qualities of honesty,
people’s personal integrity and trustworthiness. integrity and trustworthiness, that can set the ball
Societies that have successfully nurtured these rolling. Inclusion of the behavioural dimension of
qualities have done well; societies that have done human existence in policymaking has potential to
poorly on these fronts, tend to do poorly in terms play a huge role in promoting well-being.
of economic progress.