Following North’s idea about role of informal institutions in accelerating of decelerating economic growth, that led to this conversation on how social norms can affect economic prosperity. This article tries to explain the impact of societal norms on economic development in the context of Pakistan. We time and again advocate for the right kind of policies that promote development and growth. However, policies, let alone, cannot guarantee economic development. We need to dig a little deeper to bring a prosperous change, and that can happen when the society sets norms that stimulate development. Highlight some examples where societal norms prevalent in Pakistan hinder economic development.
There is often a mutual consensus on corruption hindering Pakistan’s path towards prosperity. Let us analyze corruption through the informal lens of social norms. Corruption, misuse of public resources in a way that serves personal interest, exists because of societal norms of gift giving and reciprocity. We, as Pakistanis, love to receive gifts and then return them, so as to maintain our social status. We are such concerned about receiving and giving gifts that the wedding presents given to a couple are often reciprocated by the same monetary value of present originally given. Given such a strong norm of gift exchange, people often use this for their personal interest. Once someone receives a gift, in terms of a bribe, is expected to return the gift by doing the briber some sort of a personal favor.
Pakistan’s economy is heavily characterized by consumerism, which is purely a result of social and cultural norm. We Pakistanis just love to consume to maintain a certain level to image in our society.Our desire to attain a certain level of position in the society has made out needs insatiable. As a result, we consume a lot and save too little. This results in low domestic investment, which hinders productivity and economic growth.
One big problem that Pakistan faces is that of keeping it in the family, which can lead to favoritism. I explain this as phenomena based on social norms.Giving unnecessary benefits to your familial relationships is seen as one’s responsibility towards the family. Failure in doing so is not rewarded socially; hence one has to comply with this social norm. People holding public offices are often held with these expectations of doing personal favors.
There is often a mutual consensus on corruption hindering Pakistan’s path towards prosperity. Let us analyze corruption through the informal lens of social norms. Corruption, misuse of public resources in a way that serves personal interest, exists because of societal norms of gift giving and reciprocity. We, as Pakistanis, love to receive gifts and then return them, so as to maintain our social status.
We are such concerned about receiving and giving gifts is that wedding presents given to a couple are often reciprocated by the same monetary value of present originally given. Given such a strong norm of gift exchange, people often use this for their personal interest. Once someone receives a gift, in terms of a bribe, is expected to return the gift by doing the briber some sort of a personal favor. Now, there are countless example’s one can give in regards to this phenomenon. Such a norm is so binding, that an individual might not be willing to do a favor, but has to do so in order to conform and preserve their social image.
To conclude, I would like to say that it is, indeed, quite difficult mold social norms, due to kind of inertia they exhibit, especially in the short and medium term. Changing norms take ample time, as it requires a lot of unlearning that can often be cumbersome. However, what can be done to bring about a positive change is to start up a conversation regarding how certain societal norms are detrimental to the overall health of the economy. As for the policy makers, policies should be crafted in way that keeps in mind the existing norms of the society.