Law and Social Norms
Abstract and Keywords
Legal norms are often seen as a means to regulate behaviour when neither self-interest nor social norms produce the desired behaviour in individuals. This suggests, on the one hand, that the law should regulate those areas in which social norms do not exist and provide support and extra enforcement in those areas where social norms exist. It also suggests on the other hand that there seems to be no questioning of the intrinsic efficiency and fairness of existing social norms. This article first looks at the genesis of social norms and the mechanism of their enforcement. This allows a closer inspection of the efficiency and fairness concepts. It then considers the impact that introducing legal norms has in contexts in which social norms already exist and in those that social interaction left unregulated. The main issue here is that the social norms prevailing at some historical moment may be just an equilibrium among multiple equilibriums. Given many possible equilibriums, we need to explain why and how one equilibrium is selected and others are rejected. The scholarship on social norms emphasizes that expressive acts in law can select the equilibrium. Legal norms seemingly reinforce existing social norms, bending them towards the law when discrepancy exists and favouring their creation where social norms do not exist. However, legal regulation can also destroy existing social norms (crowding out) or it can be defeated by them (legal backlash and countervailing effects).
Legal norms are often seen as a means to regulate individuals when self-interest does not produce the desired behavior as measured by efficiency and fairness.1 As Oliver Wendell Holmes, Jr. (1897) posited, laws are for the “bad man,” a man “who cares nothing for an ethical rule which is believed and practised by his neighbours.” Then, laws should matter when neither self-interest nor social norms provide the right incentives to individuals.
This latter statement paves the way for a twofold argument. On the one hand, it seems to suggest that the law should regulate those areas in which social norms do not exist and provide support and extra enforcement in those areas where social norms exist. On the other hand, there seems to be no questioning of the intrinsic efficiency and fairness of existing social norms.
In this chapter we discuss both issues. First, we look at the genesis of social norms and the mechanism of their enforcement. This allows a closer inspection of the efficiency and fairness concepts. In the study of social norms, “efficiency” has several standard meanings, notably Pareto efficiency, cost–benefit efficiency, and welfare maximization. “Unfairness” also has several possible meanings, but the most frequently discussed today is discrimination based on race, ethnicity, gender, or sexual orientation. In some circumstances, social norms are efficient and fair, requiring no regulation so long as private and criminal law operate in the background. In other circumstances, unregulated social norms waste resources or discriminate against individuals or groups. In principle, regulation can correct these normative failures. In practice, regulations correct failures in social norms or worsen them depending on the politics of regulation—who has power, and who benefits from efficiency and fairness. This leads us to consider the (p. 467) impact that introducing legal norms has in contexts in which social norms already exist and in those that social interaction has left unregulated.
The main issue here is that the social norms prevailing at some historical moment may be just an equilibrium among multiple equilibriums. Given many possible equilibriums, we need to explain why and how one equilibrium is selected and others are rejected. A complete model of law and social norms encompasses the equilibriums and the selection mechanism. As we will show, the scholarship on social norms emphasizes that expressive acts in law can select the equilibrium. Legal norms seemingly reinforce existing social norms, bending them towards the law when discrepancy exists and favoring their creation where social norms do not exist. However, legal regulation can also destroy existing social norms (crowding out) or it can be defeated by them (legal backlash and countervailing effects).
The law and economics analysis of social norms deals with individual preferences and the way in which these are formed. Generally, in other areas of applied economics, individual preferences are given and stable. Social norms instead depend on internalized values, not just external threats. Internalizing a social norm modifies a person’s commitment to values. Commitments to values affect personal identity, and personal identity affects a person’s understanding of his self-interest. Thus, in order to explain how social norms work, a good theory should look at how people develop “preferences,” analyzing socialization, internalization, and identity.
22.2 Conforming with Social Norms: Coordination, Sanctions, Internalization
Why do social norms arise and why do people conform? In the law and economics literature, “social norm” sometimes refers to any regularity in the behavior of people, regardless of its cause.2 However, the phrase is often used more restrictively. Most scholars, in fact, restrict the phrase “social norms” to behavioral regularities with particular causes.3
We are going to identify three causes of conformity: a) coordination in a multiple-equilibriums environment; b) fear of non-legal sanctions; c) internalization.
First, some people conform to social norms because they gain from doing the same thing as others. Conforming to the norm serves their interests so long as other people also conform to the norm, which implies that conforming is a Nash equilibrium. For example, most people will drive on the left-hand side of the road if they believe that others will also drive on the left-hand side of the road. In these circumstances, game theorists often call the behavior a “convention.” Thus Young (1993) defines a “convention” as (p. 468) a “pattern of behaviour that is customary, expected and self-enforcing. Everyone conforms, everyone expects others to conform, and everyone wants to conform given that everyone else conforms.”
The second reason for conforming to a social norm is fear of a social sanction. Social norms typically require some individuals to bear costs or forgo benefits. Absent sanctions for non-conformity, the dominant strategies favor violating the social norm (e.g. prisoner’s dilemma-like situations). Many social norms are obligations backed by non-legal sanctions. When violating a social norm serves immediate self-interest, fear of non-legal sanctions can tip the balance of self-interest in favor of conforming. The behavioral regularity described by the social norm may depend on the effective threat of social sanctions.
By analogy with the “imperative theory of law,” according to which a legal rule is an obligation backed by a state sanction, Cooter (2000) defines a social norm as an “obligation backed by a non-legal sanction.” The word “non-legal” in this context refers to the nature of the sanction (like shaming, stigma, shunning, criticizing, refusal to deal) and the kind of people enforcing it (private citizens).
Sanctions are necessary to sustain social norms that are not pure conventions that benefit everyone. Pure conventions help people coordinating and are self-enforcing. The fact that not all social norms are pure conventions explains why people publicly uphold some norms and privately disobey them when unobserved.4 In his study of the Ik traditions and habits, Turnbull (1972) reports that members of this ethnic group, living in the northeastern mountains of Uganda and suffering from extensive famine, often tried to elude situations where compliance with social norms of reciprocity was expected from them.
Coordination and fear of non-legal sanctions are two reasons why people conform to social norms. In “The Grammar of Society: The Nature and Dynamics of Social Norms,” the philosopher and psychologist Cristina Bicchieri combines these reasons into a definition of social norms. Social norms are “conditional rules” such that individuals prefer to conform when they expect a sufficiently large proportion of the population to conform (coordination or “empirical expectation”), and they believe that a sufficiently large proportion of the population might sanction them if they don’t (fear of sanction or “normative expectation”). The empirical expectation of conformity is the belief that a behavioral regularity exists, and the normative expectation is the belief that social sanctions enforce it.
Coordination and the fear of sanctions are not the only reasons why people conform to social norms. The third cause of conforming to a social norm is internalization of the obligation. Even without fear of legal sanctions, some people do their duty from conviction. They will sacrifice self-interest to do their duty as they perceive it. In economic language, people who internalize an obligation acquire a preference to conform to it. They (p. 469) are willing to pay to conform to a social obligation, just as they are willing to pay for a boat ride on a lake. Performing an internalized duty is like consumption in that a person will pay to do it. Conversely, violating an internalized duty is like work in that a person must be paid to do it.
Coordination, sanction, and internalization are three causes of behavioral regularities in social norms. A definition of “social norms” must comprehend all three causes in order to encompass the models in law and economics. Thus we could define a “perfect social norm” as a behavioral regularity caused by coordination, non-legal sanctions, and internalization. However, we will not labor over the definition. Economics is more concerned with causes than meanings, and so are we. Having explained three causes of individual behavior that sustain social norms, we now turn to how social norms arise and to their efficiency.
22.3 The Efficiency and Fairness of Social Norms
We have just seen that a convention can be a social norm, whereas a social norm is not necessarily a convention, as it may not be self-enforcing.
This raises two different issues. First, how are social norms created and what legitimizes them? Second, are social norms always efficient? These two issues can hardly be separated. Many social norms develop from conventions or religious imperatives. As Sugden (1989) effectively explains, conventions typically spread because of past experience, common background, and analogy. There is no guarantee that the actions that allowed coordination in the past are the most efficient (whichever definition of efficiency we deploy). Most decisions are made in a backward-looking, myopic approach. One example should clarify. Sugden (1989) reports that in a village on the Yorkshire coast, people shared driftwood scattered after a storm following a first-on rule. There is, however, no historical account of the reasons that led to its adoption and, even if the first-on rule satisfies some efficiency criteria (it is indeed a very cheap way to establish property rights over valuable objects), it is just one of many possible rules, some of which may be preferable in some respects. In theory homo oeconomicus is supposed to follow a forward-looking, rational expectation approach. Evidence seems to indicate that this does not happen in practice. On the contrary, backward-looking decisions typically imply systematic errors and may lead to the adoption of a rule, which would then be enforced and kept thereafter. The costs of changing it would be perceived to be too high compared to the benefits, especially in coordination games. This means that, in a multiple equilibriums setting, there is not only the problem of equilibrium selection but also a potential “path-dependency trap,” due to the costs of moving from an equilibrium to another.5
(p. 470) Similar considerations can be made regarding the fairness of social norms. Many social conventions have turned into strict social norms that limit the rights and the dignity of political and ethnic minorities in conflicts.6 The interplay of honor, stigma, and the law is often responsible for the perpetuation of such rules. Benabou and Tirole (2011) show how such forces, together with the expressive power of the law, may explain why people resist legal changes that would enhance efficiency and lead to more “effective” laws. Societies tend to renounce cruel and unusual punishments, even if potentially very effective, to express the value they attribute to being civilized. Similar forces may explain the resilience to change discriminatory norms, as this might undermine the current design of institutions or reduce job availability for people belonging to dominant social groups. For instance, an ill-placed attention to “family issues” may explain the resistance to changing social norms that limit freedom and career possibilities for women.
Given path-dependency and resilience, how do social norms change and what drives their evolution? Often, societies seem to lack a mechanism to correct for “bad” social norms. Changes follow great, unexpected, and possibly traumatic historical events. There is, however, the possibility for direct intervention, conceivably paternalistic in nature, by the lawmaker, and we are going to analyze it.
22.4 Changing Social Norms
The change in social norms operates through coordination, sanction, and internalization.
First we discuss change through coordination, as with a pure convention. The essence of a coordination problem is selecting among multiple equilibriums. When a coordination problem is solved for the first time, a social norm emerges. When people change the coordination equilibrium, a social norm changes. As explained, individuals will conform to a coordination equilibrium if they believe that others will conform. Thus creating or changing a coordination equilibrium requires making enough people believe that others will conform to the new social norm.
An entrepreneur, according to Kirzner, is someone who knows future prices, so he can make more profitable investments than others.7 Similarly, a “norm entrepreneur” (Ellickson, 2001) knows the future coordination equilibrium. Norm entrepreneurs gain by receiving social esteem and empowerment from others. Since a norm entrepreneur foresees the future, he can induce others to believe that they will gain from complying with a new norm.
For coordination norms, the entrepreneur induces people to select a new equilibrium. This possibility implies the existence of multiple equilibriums. The ease of selecting a different equilibrium depends on disequilibrium dynamics. Change from one norm to (p. 471) another is particularly fast when the old norm is unstable and the new norm is stable. Consequently, a disturbance that moves people away from the unstable norm will cause them to converge towards the stable norm.
Sunstein (1996) considers convergence to one stable norm as a “bandwagon” or “cascade” effect. People hide their true preferences for fear of getting a social sanction if their belief is different from the social norm. Carbonara et al. (2008) consider instead a theory encompassing more possible outcomes, and explaining a wider variety of possible reactions to legal innovation. Instead of converging to a single social norm, another possibility is that different groups of people converge to different social norms. Here there are different stable equilibriums, and individuals in one group proceed towards one of them, while individuals in another group proceed towards another one. Individuals cluster around different beliefs and multiple social norms coexist in the community, one for each cluster. At the limit, society may end up very polarized, with people clustering around opposite social norms.
We have been discussing cases where change to a new social norm is easy because the initial social norm is unstable. Conversely, change from an old norm to a new one is difficult when the old norm is stable. Given a stable equilibrium, small disturbances have no lasting effect—the system departs temporarily from the old equilibrium and subsequently returns to it. Thus social norms are often described as “sticky” or “conservative.” Changing a sticky norm requires a large disturbance that takes the system far from the stable region.
The intervention of the norm entrepreneur would be particularly useful when either many competing social norms regulate behavior in a given society (for example, because society is fragmented into several groups, often in conflict) or when a unique, inefficient, and stable social norm exists.
A social norm can be changed also by changing a social sanction. In many economic models, the threat of sanctions determines the level of conformity to the norm. To illustrate, assume that individuals must decide whether to do A or B, where A and B are substitutes. “A” might refer to conforming to a social norm, and “B” might refer to violating it. Purely self-interested individuals will choose the act with the higher pay-off. In these circumstances, the willingness of more people to sanction wrongdoers will result in more conformity with the social norm.
These facts have important consequences for norm leadership by entrepreneurs and charismatic figures. A norm leader may change behavior also by convincing more people to sanction norm breakers, besides convincing more people to conform to the norm. Willingness to punish non-conformity affects the equilibrium as much as willingness to conform.
These facts have important consequences for norm leadership by entrepreneurs and charismatic figures. A norm leader may change behavior primarily by convincing more people to sanction norm breakers, rather than by convincing more people to conform to the norm.
So far we have been discussing the change in social norms that can be produced by norm entrepreneurs, without specifying whether they have a public or political role, (p. 472) or they are private citizens engaging in social activities and opinion leadership. Social norms can be changed also through law. The law, in fact, possesses the power to “express” the values that a society has or should have and can be used to reinforce or change existing social norms. Caution is, however, needed when the law operates in the presence of contrary social norms, since the two types of norms may interact in an unexpected fashion, leading to undesired outcomes. We now turn to the analysis of the complex interaction of law and social norms.
22.5 The Connection of Social Norms and State Laws
Expressive law theories stress the ability of formal rules to reinforce, bend, and modify social norms and consequent behavior. The expressive effect of the law operates independently of sanctions, meaning that even sanctionless rules will be internalized and obeyed by individuals. If the rule is also accompanied by a sanction, the expressive effect will be stronger and the presence of the external incentive will simply speed up internalization.
However, legal regulation can also destroy existing social norms (crowding out) or it can be defeated by them (legal backlash and countervailing effects).
22.5.1 The Expressive Function of the Law
As mentioned, the law carries the power to express social values. This is what scholars define as “the expressive power of the law,” which has the ability to signal what society expects from its members and to mold individual preferences.
In contexts in which a social norm does not exist or where multiple norms coexist, lawmakers may be willing to “manage” social norms, creating new ones or bending existing ones towards what they reckon to be more acceptable behavior. This is likely when existing norms are considered either inefficient or unfair towards parts of the society. In their “management” activity, lawmakers can use the “expressive” function of the law (Sunstein, 1996; McAdams, 1997; Cooter, 1998, 2000): by enacting a law, the government makes a “statement” that strengthens the desired norms embodied in the law while weakening undesired ones.
The expressive power of the law exerts its effect through different channels.
1) Legal innovation can change the social meaning of given actions and behavior;
2) New laws help create “focal points,” attracting attention towards certain actions and changing individuals’ expectations about other people’s behavior, favoring coordination; (p. 473)
3) Legal norms can change preferences, prompting individuals to “internalize” the values embodied in the law.
We are now going to discuss these channels in turn. It is, however, interesting to notice that, through each of these channels, the law can influence behavior independently of the sanction it imposes (McAdams, 2000a).
Let us consider first the link between the law and social meaning. To understand this link, some anecdotal evidence can be useful. In the United States, the ban on public smoking has reduced the number of young black Americans who smoke by changing the social meaning of smoking from rebellion to dirtiness and foolishness. Legal innovation can therefore be used to change the social meaning of given actions and behavior.
Social meaning is the semiotic content, or symbolism, attached to a particular action or gesture. Specifically, it is the way individuals belonging to a particular society or community understand and interpret a given action (or inaction).8 Once individuals are aware of social meaning, they can use it, as they can be “tools—means to a chosen end.”9 There are many examples of such selective use of actions: clothing, the selection of certain words in special contexts, insults, and so forth. What is most interesting for our argument is that social meanings can be used by everyone, either groups or single individuals, and can be used by governments, too. For instance, if the majority of the population follows traditional religious beliefs, the government can use “family values” to advance state goals; if the majority has health concerns, the government can leverage them to impose a ban on smoking in public places. Laws expressing existing social meanings have greater chances to generate compliance.
Social meaning can be built and changed through law. An enlightening example is provided by Lessig (1996) and is related to possible techniques used to eliminate dueling. While prohibiting duels in itself is neutral for social meaning, the sanction provided to punish violators does affect it and might improve substantially the efficacy of the prohibition. Consider two possible legal strategies: imprisoning duelers and inflicting a sanction that, in addition to imprisonment, prevents duelers from holding public office. Both techniques have the effect of increasing the cost of dueling but have very different impacts on social meaning. The first type of sanction simply increases the cost of dueling, raising its expected harm. The meaning of the act, however, remains unaltered: duelers are gentlemen defending their honor and that of their community. Disqualifying duelers from public office not only increases the cost for duelers but it also changes the meaning of the act and, more precisely, the meaning of disobeying the law.
Assume in fact that the regulation imposes imprisonment: complying with the law means that the dueler is not willing to defend his community’s honor because the cost of doing so is too high. He may well be seen as a coward, someone willing to escape his duty to serve his community. Consider the alternative case, in which the sanction is disqualification from public office. Now, if someone refuses to duel, it might either be (p. 474) because she refuses the challenge and is therefore a coward, or because she privileges another type of public duty that the law has put in competition with the duty of defending the community’s honor.
The second type of sanction “ambiguates” the meaning of refusing to duel, changing the possible meaning of the act and therefore reducing its cost, rendering compliance with the law more attractive.
The idea that a social meaning is attributed to actions and behavior is particularly important in case of the so-called “top-down” lawmaking. As the previous example well illustrates, legal innovation that openly challenges current social meaning might reinforce a given behavior rather than reduce its prevalence. Manipulation of social meaning by the legislator has therefore to be rather subtle, creating new incentives that counteract the ones provided by the original social meaning. In this sense, the lawmaker has to act as a clever “norm entrepreneur.”
Changing a social meaning through lawmaking is a paternalistic act that legislators might sometimes want to perform to produce merit goods. More often, a legislator will choose to embed the existing social meaning into a law, which therefore becomes an imperative expression of social meaning. If social meaning already exists and is shared in a community, why do we need to express it also by law? In other words, why do we need the expressive power of the law?
This leads us straight to the second channel of the expressive power of the law, namely the creation of focal points. The expressive power of the law plays a major role in situations characterized by coordination problems (McAdams, 2000a). For instance, by stating that drivers should keep to the right, the law creates a “focal point,” solving a coordination problem. Moreover, laws legitimized by a democratic voting process are usually positively correlated with “popular attitudes” (McAdams, 2000b) and thus provide a signal of those attitudes, helping individuals to form beliefs about what others will think of their behavior. Given that people normally care about being approved or disapproved by others, the law can influence behavior even without a legal sanction.
Another example of situations requiring coordination due to multiple equilibriums are potentially conflicting situations in which individuals have to share resources or, more generally, yield to others.10 A possible equilibrium would be to yield when the other does not yield or vice versa. The worst possible scenario occurs when no one yields. A law might help in this case, because it might allocate entitlements, specifying who has to yield and under which circumstances.11
Possibly the strongest effect of expression is the change in preference that the law might produce in individuals, which is the third channel of expressive power. Particularly, the law might induce individuals to internalize the values it embodies (Cooter, 1998, 2000). To see how that happens, consider that obeying a norm is a costly act (money, opportunities, etc.) and individuals are willing to obey if and only if they (p. 475) derive some kind of benefit from it. There might be an extrinsic value from obeying (say, I keep my promise because I want to be perceived a trustworthy person, which would enhance my business opportunities). More importantly, there might be an intrinsic value: obeying benefits me inasmuch as I have internalized the norm and I feel a warm glow when conforming to my moral imperative. Intrinsic values are the psychological equivalent of “tastes” or “preferences.” People who have a taste for obeying a norm are prepared to bear the costs of compliance independently of any resulting advantage or disadvantage. What is the role of the law in such a scenario? If people believe it a moral duty to comply with legal norms (Tyler, 1990), their willingness to pay for compliance increases. The taste for obeying the law can also explain compliance with legal rules that are not aligned with current morality and social norms, since it increases the cost of disobedience and enhances internalization. More precisely, people tend to align their concept of morality with the law (Tyler, 1990 describes such a process with respect to law; and Tyler and Huo, 2002 extend the argument to the decisions of authorities).
Understandably, the closer the content of the law to existing social norms, the greater its legitimacy. Tyler (1990) and Sunshine and Tyler (2003) argue that the public’s perceptions of legitimacy influence people’s compliance with the law.
As we will see below, laws can have unexpected effects on behavior when they interact with social norms, no matter whether the law and norms are aligned. Such unexpected effects counteract the expressive power of the law and might require heavy sanctioning to induce the desired behavior in people.
22.5.2 Crowding Out and Crowding In
Legal norms seemingly reinforce existing social norms, bending them towards the law when discrepancy exists and favoring their creation where social norms do not exist (expressive law theories).
However, legal regulation can also destroy existing social norms (crowding out).
More generally, legal norms and sanctions especially are often proven to curb cooperative behavior and destroy social norms of cooperation. Frey and Jegan (2001) and Frey and Oberholzer-Gee (1997) argue this might occur because the law crowds out intrinsic motivation, by hitting on individuals’ self-determination and self-esteem. Somehow, the legal rule is perceived as a lack of acknowledgment of individuals’ intrinsic motivation and as a lack of trust. It may also happen that individuals adopt cooperative behaviors and comply with social norms of cooperation when they want to signal their trustworthiness and intrinsic motivations to others. If a law prescribes cooperation, it becomes impossible to distinguish whether somebody is being cooperative for fear of sanction or for intrinsic motivation. This might discourage their cooperation.
In his famous example of blood donors, Titmuss (1970) argues that providing incentives to blood donors may reduce blood supply, as purely altruistic donors are demotivated by the reward. It may also reduce the quality of the donated blood. Hepatitis rates from blood transfusions significantly decreased when the blood was donated rather (p. 476) than purchased. When monetary incentives are not involved, people supplying blood are donors who have no reason to hide an illness. Interestingly, Costa-Font, Jofre-Bonet, and Yen (2011) find that the nature of the rewards matters. They collected data on blood donations in fifteen European countries in 2002, showing that monetary rewards may indeed crowd out blood donations, whereas non-monetary rewards do not.
Similar effects can be found in case of norms of cooperation, in particular with norms of cooperation favoring an entire community. Frey and Oberholzer-Gee (1997) present a field experiment on the implementation of a nuclear waste facility in a Swiss town. Citizens were asked whether they would vote in favor of the establishment of the facility in their community. More than half of them agreed. However, they were later offered monetary compensation to allow the waste facility and were asked to vote again. The level of support for the project dropped by more than 50%. Several explanations could be offered for this phenomenon. On the one hand, by refusing to agree on the public project when offered compensation, citizens might be simply trying to raise their stakes, like in an anticommons scenario.12 They expect that their refusal might trigger an increase in the compensation offered by the government. Alternatively, an offer for compensation might be perceived as a signal that the facility implies serious risks for public health, risks that citizens were not able to consider at the time of their first vote. Whatever the explanation, this is considered clear evidence that the positive feeling that citizens develop when they support public projects benefiting an entire community (in this case, the entire Switzerland) is crowded out by the offer of monetary compensation. The explanation is, however, important if the legislator is willing to enact a law avoiding such crowding effects. If the first explanation prevails, crowding out can be avoided by making it clear that compensation cannot be renegotiated and that there will be no increase following a refusal. If the second prevails, an information campaign stressing how safe waste facilities are might be the preferable option.
22.5.3 Legal Backlash and Countervailing Effects
We have seen that legal norms can shape social norms and the behavior driven by them via the expressive function and by crowding in. However, legal norms can have a detrimental effect on social norms (crowding them out), defeating a system of private enforcement and totally shifting its costs onto the public sector. Legal norms can have even worse effects, not only defeating possibly virtuous social norms but polarizing societies, exacerbating possible social conflicts, and even worsening individual behavior, increasing the prevalence of actions that the law intends to limit.
Before looking at these undesired effects of laws, it is interesting to mention that, in the presence of very strong social norms, legal rules may be irrelevant. That is to say that “norms control individual behaviour to the exclusion of law” (see McAdams, 1997, p. 347). Consider, for instance, Ellickson (1991), who argues that the way neighbors (p. 477) resolved disputes in Shasta County was independent of the property regime adopted, since a unique social norm governed, irrespective of the legal norm. On a different key, Kahan (2000) points to the existence of social norms so strongly embedded in common behavior that enforcers fail to enforce laws contrary to such norms (the “sticky-norm” problem). The sticky-norm problem affects laws that depart too much from current social norms and has the consequence of reinforcing current social norms. Not sanctioning the behavior prohibited by the legal norm but admitted by the social norm reasserts the behavior the law was trying to change, encouraging and possibly perpetuating it.
When a new law is enacted, it has a coordination and internalization effect, which attracts individual opinions towards the value embodied in the law. Such effect is stronger the closer the law is to existing social norms. Otherwise, there is the possibility that countervailing effects arise, where legal intervention contrary to existing social opinions repels those who hold strong contrary beliefs. The final impact depends on the relative strength of such two forces, with the countervailing effects more likely to dominate the farther away the law is from the prevailing social norm (Carbonara et al., 2008a, 2008b).
What happens when a new law is enacted where either segmentation or polarization of social norms exists? The easiest case to consider is a new law with a strong internalization and coordination effect. This reduces the attractiveness of social norms that lie far away from the new law. Such norms will be abandoned in favor of social norms closer to the new law and, if the attraction exerted by the latter norms is strong enough, we might witness a convergence to a unique social norm very close, if not identical, to the law. This is what happened after smoking was banned from public spaces in many countries around the world. Even smokers complied with the law because they felt it was embodying a widespread belief about the health hazards of smoking. The social norm changed through internalization of the values expressed by the law.
The opposite would occur in a case where the opinions expressed in disagreement with the new law acted as strong attractors, thus offsetting the coordination and internalization power of the law. Social norms far off the new law are reinforced, and this might result in different groups within a society following different norms: some of them might violate the legal prohibition, some might adopt stricter rules than the law, and finally, some might comply with the law. In the worst-case scenario, society might end up very polarized and social conflicts might possibly arise. Even if polarization does not occur, and violation of the law is the prevalent behavior, the law would anyway be ineffective in forging a pattern of behavior consistent with the law: society would converge to a unique social norm contrary to the law.
So far we have considered how the law impacts on social norms, possibly changing them in unexpected and undesirable directions. Legal rules in the presence of countervailing social norms may not only impact existing social norms but also drive behavior in directions opposite to that intended by the lawmaker. Carbonara, Parisi, and von Wangenheim (2012) present a model explaining in what circumstances this might happen. According to this model, the incentives to comply with a law depend on the (p. 478) magnitude of the sanction, the expressive power of the law, and the degree of perceived legitimacy. While the first two elements push towards compliance, when perceived legitimacy is low people may be dragged into disobedience.
Perceived legitimacy may be low when the legal rule has little expressive power and the values embodied in the law clash with society’s shared values. A new law that is contrary to current social values or more restrictive than people deem fair triggers opposition, where such opposition can take the form of either open protest or civil disobedience. An enlightening example is the reaction by the Internet community to the severe punishments that were adopted against copyright infringers in the past few years. Internet users often reacted to the huge sanctions raised against private citizens who downloaded music from the Internet illegally. They protested fiercely, boycotted entertainment majors, and even engaged in fundraising to fully cover fines.13 The result of such protests was a steady increase in the number of users of peer-to-peer technologies, notwithstanding increasingly severe sanctions.14 Moreover, there is experimental evidence that sanctions reinforce the norms prevailing in the file-sharing community, producing polarization.15 Protest indicates social disapproval of the legal rule and induces individuals to expect that society will approve or tolerate infringement, thus “subtracting” from the legal sanction (as in the case of fundraising to cover the fines of music pirates). If such effect is strong enough to compensate for the expressive power and for the incentive effect of the sanction, outcomes opposite to those intended by the lawmaker might ensue. Similarly, countervailing effects may be observed when society perceives a legal norm as too lenient relative to the pre-existing social norm. In that case, individuals may be inclined to “add” social sanctions to the behavior (disapprobation, further punishment, etc.).
Countervailing effects may be particularly strong if protest reacts faster than actual behavior and if the reaction to legal innovation depends also on the relative change in the strictness of the law. Protest has the opportunity to react faster (or, at least, earlier) than behavior whenever a new law is announced or debated before it is enacted. This affects opinions and protest before actual incentive effects on behavior are possible. Countervailing effects are thus exacerbated, since protest may result in a reinforced social norm. When the law is finally enacted, it is counterbalanced by a much stronger contrary social norm and countervailing effects are more likely to occur.
Similarly, protest tends to react both to the absolute strictness of a law and to the change relative to a previously existing law (or to “a zero sanction”, if no law regulating a certain matter existed before). Then, if the sanction for music piracy is raised from $100 to $10,000, much more protest is likely to arise than in the case where the sanction increases from $100 to $500. The implication of this is a possibly huge reaction when a new law is passed that departs very much from current social values, which can make contrary social norms extremely strong. After some time, people are likely to get used to (p. 479) the new law and protest may subside. However, the initial reaction may reinforce contrary social norms so much that countervailing effects may endure in the long run, even after the initial effect subsides.
In general, the existence of countervailing effects indicates that laws intending to induce substantial shifts from current norms may have to be introduced gradually, in small, consecutive steps allowing for adaptation of individual values to the content of the law. More interestingly, countervailing effects of social reaction could be used to induce legal deterrence by means of a reduction in the strictness of the law. When facing a low sanction, people might not object to its application, thus magnifying its deterrence effect.
22.6 Conclusions: Substitutes, Complements, Antagonists?
The analysis in the previous sections shows that the impact of legal innovation on social values and behavior depends on several, often contrasting factors. Particularly, they should balance extrinsic incentives (sanctions reducing the net benefit from action), the expressive power, and possible crowding-out and countervailing effects. First of all, absent a strong expressive power (which implies a reduced ability of individuals to internalize the values embodied in the law), laws differing substantially from prevailing social norms should be introduced gradually, to allow individuals to adapt their values to the content of the law. Notice that phenomena like crowding-out and countervailing effects in particular reduce the power of extrinsic incentives, to the point that it may be counterproductive to impose a very high sanction. Internalization then becomes the crucial variable for successful legal innovation. This leads to another interesting and apparently paradoxical insight. Legal deterrence could increase if the strictness of the law is reduced.
What, then, is the relationship between legal and social norms? Are they substitutes or complements? Expressive law theories point to the possible complementarity of legal and social norms. The law can reinforce existing social norms by helping internalization, reinforcing compliance within a particular social group, and spreading them among individuals that do not belong to that social group but interact with it regularly. When law and social norms are aligned, their coexistence magnifies their respective power to change behavior.
Things change quite substantially if legal and social norms are not aligned and the law tries to change behavior sustained by social norms. Furthermore, the ability of legal and social norms to reinforce each other is questioned every time legal innovation crowds out existing virtuous social norms.
Interestingly, Zasu (2007) argues that social norms and the law tend to be complements when societies are not well “connected,” so that social sanctions are hardly (p. 480) applied. Conversely, if social norms are consistent with welfare maximization, social and legal norms are substitutes and costly legal norms are not required, as they risk crowding out “virtuous” social norms. This process of erosion of social values is described also by Posner (1998, 2000).
Legal and social norms tend to be antagonists whenever they pursue conflicting objectives (e.g. when legal norms tend to maximize overall social welfare and social norms perpetuate a predatory behavior by one group against another) and when they are heavily misaligned. In such cases, not only do they not reinforce each other, but also the introduction of the law may well be totally counterproductive, in particular when a legal sanction is applied. When law and social norms are antagonists, social norms tend to prevail and costly legal intervention is wasted.
That is why other instruments, different from sanctions, may be preferable. For instance, taxes might be a better option, as they are perceived as a “price” that individuals are free to pay if they want to indulge in a given, socially costly, behavior (like polluting). Also, positive incentives, like rewards and prizes, may be more effective. For instance, rewarding compliance may be a good idea in case of tax evasion.16
The literature on social norms and the law is vast, the effects of their interaction diverse and difficult to predict. In this work, we have tried to provide a systematic view of the subject, to help interested scholars and lawmakers to disentangle the forces involved in this process and understand the circumstances in which each of them could prevail.
This chapter greatly benefited from comments and suggestions by Robert D. Cooter, who generously shared with me his profound knowledge on the interaction between the law and social norms.
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(4) In such a case, public lies serve the purpose to avoid sanctioning, and private behavior follows beliefs about the real “rule” followed by the majority of the people in the society. An example of this could be adherence to religious prescriptions or adultery. See also Kuran (1997).