Doctoral Dissertation Research in Economics: Are moderate laws more effective than extreme ones in changing unfair customs?

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AbstractPolicy makers in many developing countries attempt to change unfair and inefficient social norms by introducing progressive laws. Sometimes these laws are ineffective in the presence of norms that conflict with these laws; other times these laws are able to change the norms by drawing them closer to the law. Understanding what makes a law effective in changing social norms is essential to crafting better laws. The development economics and legal literature hypothesize that moderate laws are more effective than radical ones in initiating behavioral change. However, the causal effect of the distance of a law from a prevailing social norm on the effectiveness of the law has not been explored in the literature. This study experimentally investigates if a moderate law is more likely than a radical one to change unfair social norms. In this experiment, historically advantaged and disadvantaged groups of high-caste and low-caste individuals in India will be employed as subjects in the experiment. The subjects will be allowed to create their own norms within the experiment and will be exposed to either a moderate law or a radical law depending on the treatment. The results of this research has important implications for policy development and implementation as well as law enforcement. "Dictator games" will be used as a major tool in the experiment. In a dictator game, the first player, "the dictator", decides how she wants to split her endowments between herself and another person, "the recipient". Each high-caste individual will be assigned the role of a "dictator" and low-caste individual will be assigned the role of a "recipient". A group of dictators will create norms within the experiment by discussing among themselves how each of them should divide endowments between oneself and a recipient. After the group agrees upon the appropriate amount to be sent to their matched recipients, each dictator will make a decision about how to divide her endowment between herself and a matched recipient. There will be two between-group treatment conditions: a moderate and a radical law condition. The moderate (radical) law will require the dictators to send a minimum of a low (high) amount. These laws will be accompanied with a small non-deterrent sanction. This experiment will shed light on how individuals' behavior, beliefs about others' actions and beliefs about what others consider as appropriate behavior change with norm creation and introduction of different laws.