Rules are ideas about how people interact with each other. They are the formal laws and social norms that govern daily life. The legitimacy of formal laws often depends on their compatibility with social norms. Social norms can complement formal laws and, in some cases, stand in when formal legal enforcement is absent or inefficient. In a guest post for the Freakonomics blog, Kal Raustiala and Chris Sprigman write about social norms among stand-up comedians.
Comics that steal jokes rarely face formal legal action. But comedians often enforce an informal rule against joke theft by sanctioning the offending comic. A joke thief can expect to be bad mouthed and ostracized by comedians who are willing to incur a cost to punish unacceptable behavior. Raustiala and Sprigman argue that informal enforcement allows comedians to “assert ownership of jokes, regulate their use and transfer, impose sanctions on joke-thieves, and maintain substantial incentives to invest in new material.”
Some commenters on the Freakonomics post argue that informal enforcement offers, at best, imperfect justice. The commenters point out that several comics remain highly successful despite their joke-stealing ways. This raises an interesting question: is the equilibrium with informal rules more efficient for enforcing ownership rights in a creative industry like stand-up comedy or is it simply a second best response to ineffective formal rules? For example, as Raustiala and Sprigman point out, the expense and uncertainty of legal proceedings keeps most disputes out of the courts.
In a related post, Rajiv Sethi explores other situations in which social norms operate as substitutes for formal laws. He points to Elinor Ostrom’s work on self-governance among groups of people with collective rights to natural resources. Among many examples, Ostrom cites the centuries-old informal rule that governs access to the communal summer meadow in a Swiss village: no villager can send more cows to the meadow than she can afford to feed privately during the winter.
Sethi also points out that social norms can enforce bad equilibria, citing oppressive attitudes about race, gender, or caste. A related issue is the extent to which formal laws and enforcement can change social norms about acceptable attitudes and behavior. Examples that come to mind include the British government’s success in reducing corruption in Hong Kong and New York City’s experience with fare beating in the 1990s.