Social Norms, Sanction,

Reciprocation, Trust and Collective

Action
 Social Capital
• Networks, norms and trust that facilitate
coordination and cooperation for mutual benefits
• Institutional relationship of mutual acquaintances
and recognition
• Solution of collective action problem
– Trust
• Trust: reduces transaction cost by avoiding need to
monitor
• Reputation: Trust depend on reputation
• Reciprocity: trust leads to reciprocity
 Norms of Reciprocity
• Contingent actions lead belief that this is how
one should behave
– More benefits participants receive from reciprocates,
higher own inclination
– Higher retribution, lower free riding
• Trust that others will be reciprocators, develops
own norms – norms of reciprocity
– Developed from reputation of other players and
estimate of risk of extending trust
 Identification of Social Norm: A Conceptual Framework (Cristina
Bicchieri)

Observe a collective
pattern of behaviour

People prefer to People follow it if they

follow it irrespective have social
of what others do expectations

Collective custom, Both Empirical and

shared moral rule or Empirical Expectations Normative Expectations are
legal injunctions to motivate actions needed to motivate action

Descriptive Social Norms

Norms
 Social Norms
Why important?
• Social norms specify what actions are regarded by a
set of persons as proper or correct, or improper and
incorrect
• Social norms enables actors to internalise
externalities by gaining control on actions
– Results in socially efficient outcome
• Norms are expectations about own and other’s actions
– Determines what is right and wrong
• Without norms people suffer from unconstrained
actions
• Norms have no legal or other formal basis, and may
sometimes even be in conflict with laws
 Conformity of Norms
Why people would follow norms?
• Emotion and Normative state
• Fairness
– if participants think that proposal for sharing costs
and benefits is fair, they are far more willing to
contribute
• Esteem
– Norms that help to solve social dilemmas need to be
shared so that individuals who act contrary to the
norm fear the reduction in esteem
• Sanction
– form of punishment against violation of different
norms
 Key to Cooperation

Reciprocation Reputation Trust

Investment in
developing reputation
Develop Norms
Heuristics
 Heuristics and Norms
• Discourage / encourage behaviors which cause
negative / positive externalities
• In repetitive situations individuals learn better
and better heuristics - best response strategies
– After experiencing repetitive benefits from their own
and from others people's cooperative action,
individuals may resolve to cooperate
– After many experience individual may resolve never to
initiate unilateral cooperation and to punish non-
cooperators
 Social Norms and Sanctions
Why important?
• Norms internalized through socialization
reduces negative externality
– Sanctions for not following norms
• Sanctions for not internalization of norms
 Legitimacy of Sanction
Why would you allow other to put sanction against you?
• Norms and sanctions: Accepting the legitimacy
of others’ right to partially control his actions
gives him legitimacy right to control other’s
similar actions
• Legitimacy of Sanctions
– Similar actions of each imposes externalities on
others
– Action is potentially self policing
– All have an interest in transferring some part of
rights to control their actions to others, in return for
partial right to control their actions
 Laws vis-à-vis Norms
• Laws are more suitable when negative
externality is greater
• Laws legitimize applicability of sanction by
determining “guilt”
– Norms do not
• Laws gives universal legitimacy
– Norms do not
• Law is more costly to enforce than norms
• Does law enforce norms or vice versa
Irrigation Water Distribution
 Irrigation in India
• Protective irrigation
– Divide the supply thinly over large area, rather than to match supply
with demand
– Optimize production per unit of scarce water
– Not to maximize production per unit of land

• Ration out water through a system of rotation

– Warabandi system
– Control and operation centralized
• Farmers have no control over availability to match crop
requirement
 Farmer’s Strategies
• Engage in time exchange
• Supplement canal irrigation with tubewell
irrigation
• Tamper with outlets
• Insert siphons over canal or distributary (theft
or bribe)
• Apply for rice shoot
 Time Exchange
• Bhaichaara system
– To fill the inadequacy of water distributed by warabandi
system, farmers borrow an irrigator’s share on the basis of
bhaichaara and returns it another time
• Cut across seasons
• Cut across tholas but common within thola
– Within warabandi framework farmers follow a distribution
pattern based on mutual understanding, cooperation or
bhaichaara
– Different normative system over and above warabandi
schedule prepared by irrigation department
• Bhaichaara works due to defined water rights
– Legal pluralism – existence of different normative systems
– Bhaichaara panchayat and committee formed on the basis
of mutual consent rather than force of law
– Time exchange prohibited under Haryana Canal and
Drainage Act but bureaucrats do not interfere
 Bhaichaara system

A B C

Week 1 15 minutes 15 minutes 15 minutes

45 minutes

Week 2 45 minutes

Week 3 45 minutes
• Time exchange is more popular than water
purchase
• Why?
• Assurance of returning back
 Supplementing Canal irrigation with
groundwater
• Canal water cheap
– If insufficient, use groundwater through tubewell
– No tubewell, buy groundwater
• Tail-enders buy from head reachers
 Water theft
• Water theft from outlet of canal water
– Hawadi – circular embarkment
• Theft take place by inserting rubber siphone over
the hawdi
• Its prevalent – both rich and poor do

Rice shoot
• Temporary pipe outlet given by irrigation department
for paddy irrigation during July –Sep
• Provide water rights