Social Norms and the Law

The New Palgrave Dictionary of Economics and the Law, (Peter Newman, ed.), May 1998

16 Pages Posted: 1 Dec 1997

See all articles by Kaushik Basu

Kaushik Basu

Cornell University - Department of Economics; IZA Institute of Labor Economics; Brookings Institution


After one eats in a restaurant, that one has to leave a tip is a social norm, and that one has to pay for the food is law. As is evident from this both norms and the law influence our behaviour. The goods that we buy, the food that we consume, the services that we render and the opinions that we express are all influenced both by the law and the norms of society. But in traditional economics there was little recognition of this fact. In recent years this has been changing and there have been several initiatives to integrate the analysis of norms and institutions with markets and the provision of public goods. This essay begins by discussing what social norms are and how they influence economic functioning and it tries to classify different kinds of social norms. It comments on the relation between norms and evolutionary processes, and the interconnections between social norms, the law and the state. It also addresses the much-discussed question: to what extent can social norms or voluntary community-based effort be a substitute for law?

Suggested Citation

Basu, Kaushik, Social Norms and the Law. The New Palgrave Dictionary of Economics and the Law, (Peter Newman, ed.), May 1998. Available at SSRN: or

Kaushik Basu (Contact Author)

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States
607-255-2525 (Phone)
607-255-2818 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics