Kaushik Basu’s new book titled”Republic of Beliefs” uses game theory to explore why some laws are obeyed while others are flouted.
No one doubts that air pollution is a big concern in the National Capital Region of Delhi. Every year, the situation deteriorates by the time Diwali arrives and the Delhi government comes up with various knee-jerk measures. This year, in addition to a number of steps taken by the government, the Supreme Court got involved. In its verdict on October 23, the apex court placed various restrictions on the sale and bursting of firecrackers on Diwali. The ruling, however, did not deter citizens of Delhi, and many went ahead and engaged in gross violations of what the SC mandated.
Basu takes the traditional economic analysis of law head-on and argues that the assumptions in conventional models of law and economics are conceptually flawed and inconsistent. Contemporary approaches assume that citizens are primarily self-interested individuals who focus solely on maximising their gains and that the state functionaries (police, bureaucrats, judges, etc.) ensure that citizens remain within the bounds of the laws. In doing so, they assume the state actors are devoid of any selfish interests and diligently follow their duty as enforcers of the law. It is therefore difficult to explain state corruption within this framework.
The mainstream approaches also assume that a new law changes the rules of the game that the society is playing and, by extension, the game itself changes. However, Basu contends that a new law or an amendment does not change the game; it only changes people’s beliefs about the rules of the game. Read more.