Using the law to change the custom

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Abstract

The custom often acts as a powerful hindrance to equity-increasing changes. In this paper, we present a simple model of legal dualism in which a progressive legal reform can, under certain conditions, shift the conflicting custom in the direction intended by the legislator. Formal law then acts as an outside anchor that exerts a 'magnet effect’ on the custom. We also characterize the conditions under which a moderate reform performs better than a radical one in improving the welfare of the disadvantaged sections of the population. We illustrate our insights using examples on inheritance, marriage, and divorce in Sub-Saharan Africa and India.

Introduction

Numerous examples attest that modern laws intended to modify or supersede customary rules have had no impact on such rules. These laws thus remain ‘dead letter’. For instance, laws enacted in Sub-Saharan Africa aimed at preventing excessive fragmentation of rural landholdings – through inheritance or land sale transactions – have never been enforced. The main cause is not the citizens' ignorance of the law but their widespread belief that, given that these laws run counter to deeply entrenched customary principles (e.g. the rights of all male children to receive a portion of the family land), it is unlikely to be followed by others or backed by appropriate sanctions (André and Platteau, 1998). In countries where the law forbids marriage payments (e.g., bride price in the Ivory Coast, Gabon, Central African Republic, and dowry in India) or sets a minimum marriage age for girls, people continue to follow the custom and to ignore the law (Ntampaka, 2004). In Gabon and Senegal, the states allow (optionally) to explicitly mention polygamy in marriage contracts. Moreover, the law provides that violation of the commitment to either monogamy or polygamy is a legitimate cause for divorce; in Senegal, the violation of monogamy can be invoked to declare the marriage void. However, the legal prescription is frequently ignored by men who renege on their commitment to monogamy (Coulibaly, 2005, Nambo, 2005, Sacco, 2008).

The dominant economic approach to social norms and informal rules provides an interesting explanation for the persistence of these norms in the presence of conflicting laws. The central idea is that the modern law is not recognized as an institution because a certain representation becomes an institution only when the agents mutually believe in it (Aoki, 2001, Basu, 2000, Bicchieri, 2006, Greif, 2006, Kuran, 1995).1 In other words, the new law must be a focal point in order to replace the prevailing custom that forms a self-sustaining system of shared beliefs. As pointed out by Knight (1992), the enactment of a new formal law alters the information about the equilibrium that the rule seeks to produce and lays down sanctions against behavior prescribed by the old rule. Whether the new formal law will replace the existing custom then depends on the ability of the new information and sanctions to change the existing expectations. Even if agents understand well the dynamics of the change of social norms conceived as coordination equilibria, the lack of a proper enforcement mechanism may prevent the switch from the old equilibrium (the custom) to the new one (the statutory law).

This dominant view puts the primary emphasis on the role of expectations. In this paper, we suggest an alternative approach that draws attention to the empowering effect of the modern law in situations where the custom benefits a privileged category of citizens and the preferences of the priviledged and disadvantaged groups are antagonistic. More precisely, the law offers the disadvantaged citizens an exit option that enhances their bargaining power inside the community. Numerous field studies support our argument. Rao (2007) thus states that legal support in India effectively adds authority to women's voice, given that their land claims are thereby strengthened, even though women do not necessarily resort to formal courts (see also Davis, 2009, Quisumbling et al., 2001). Kevane (2004) observes that in Sahelian countries divorce was not customarily granted to a wife wishing to leave her husband except in the case of proven mistreatment by the latter (see also Platteau et al., 1999). Over the recent years, however, women have progressively acquired a de facto right to leave an unhappy union. This, according to Kevane (2004), is partly because of the administrative pressure “as successive regimes continue to push for explicit legal rules and rights for women in marriage” (p. 75; see also Jewsiewicki, 1993). Hilhorst (2000) also stresses that improved legal status may provide a stronger bargaining position to women. Finally, studying the effects of Operation Barga, a program designed to implement and enforce the long-dormant agricultural tenancy laws that regulated the rights of sharecroppers in India, Banerjee et al. (2002) have found that a moderate reform of the legal contract succeeded in improving the situation of the tenants. By empowering tenants without giving them full ownership of the land, Operation Barga opened a viable way out of the status quo and enabled them to get a higher share of the additional output resulting from investment. The enhanced bargaining power of the tenants came with the new ‘outside option’ provided as a result of the reform of the legal contract.

We argue that under certain conditions the modern law can act as an outside anchor or a ‘magnet’ pulling the custom in the direction favorable to marginalized groups. We show this in the framework of a dynamic model featuring a customary authority (an informal judge) that behaves strategically. The informal judge faces a trade-off between choosing a verdict (which represents the custom) closer to his preferred one, which gives him intrinsic utility, and choosing a verdict further away from it, so as to retain disputants within the realm of his jurisdiction, which brings him social prestige. The informal judge changes the custom because of the threat of the appeal to the formal court by the disputants belonging to the marginalized group. Secondly, there is a threat of exit by marginalized citizens from the community, which means that the formal law will always be invoked by them in the event of a dispute. When deciding on leaving the community, marginalized people weigh the benefits of receiving a more favorable judgment when a dispute arises and of earning alternative incomes outside the community against the cost of losing the benefit from the community-level public good. In deciding to challenge the verdict of the customary authority (but staying within the community), a marginalized citizen weighs the resulting punishment inflicted on her against the cost of an unfavorable judgment.

The implications of our model for the choice of a legal reform – moderate versus radical – are ambiguous. This is because a progressive law may not only incite more people to challenge the custom but also encourage those with the best outside opportunities to leave the community. To the extent that the benefits from the public good produced by the community vary positively with community size, there are effects operating in opposite directions. Therefore, a radical legal reform is not necessarily most favorable to the disadvantaged citizens.

The remainder of the paper is organized as follows. Section 2 presents the model of legal dualism with two normative systems: the statutory law and the custom. Section 3 studies the optimal legal reform from the viewpoint of the marginalized section of the population, asking whether the most radical law is always the most favorable to the interests of this group. Section 4 discusses two possible extensions of the model. Section 5 presents and discusses several examples illustrating how changes in various key parameters of the model affect the way in which conflicts are resolved in customary settings. We draw these examples from the studies on women's rights and land tenure, particularly in the context of Sub-Saharan Africa and India. Section 6 situates our theoretical analysis in the existing law and economics literature. Section 7 concludes.

Section snippets

Basic assumptions

We consider a heterogeneous community in which conflicts are arbitrated by a customary authority and, possibly, by a formal judge. The customary judge lives in the community and has a preferred judgment (in each judicial case) which represents the community's dominant custom at the present time. In other words, the custom is modeled as a fairness standard that has come to prevail following a long-run evolution that we do not try to explain. It typically aims at maintaining peace and social

Analytical argument

From the comparative statics analysis, it is evident that one positive effect of a legal reform favorable to the commoners is that it causes the custom to move in the direction of the modern law. Such a legal reform also has a direct impact on the welfare of those who find themselves outside of the community, and on those within the community who are embroiled in disputes severe enough to prompt them to challenge the authority of the informal judge. These two effects would suggest that the

Extensions

In this section, we discuss the possible extensions of the model in two directions. While we do not model these extensions explicitly, we discuss the robustness of our main results to these changes (given that the applicability of our model for policy purposes depends on it).

Application: formal laws and informal rules in the case of women's and immigrants' rights

This section illustrates, on the basis of several examples, how the different variables highlighted in our model influence the welfare of the disadvantaged groups. Before presenting these examples, it is useful to summarize the results of the model in terms of two outcome variables: whether the custom changes or not (whether the ‘magnet effect’ operates or not), and whether some people leave the community or not. As we can see from Table 1, there are four possible configurations. Case (i)

Related literature

One important approach to the role of modern law when solutions imposed by legislative fiat tend to produce dismal results is grounded in the common law process. The central idea is that customary rules are more likely to change if they are allowed to evolve and modernize themselves by being gradually assimilated by the law through successive court decisions rather than through one-shot acts of the parliament.12

Conclusion

The impact of reforms brought through the channel of modern state agencies has always been a central issue in developing countries eager to transform their institutions and their people's behavioral patterns so as to effectively meet the pressing challenges of long-term economic growth and poverty reduction. There are many well-known difficulties involved in a legalistic approach to change, in particular, people's ignorance of modern laws, manipulation of these by elites adept at using

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    We thank two anonymous referees, Dilip Mookherjee (Editor), Philippe Aghion, Jean-Marie Baland, Kaushik Basu, Fran¸cois Bourguignon, Giacomo Calzolari, Marco Casari, Matteo Cervellati, Avinash Dixit, Raquel Fernandez, Garance Genicot, Maitreesh Ghatak, Andrea Ichino, Sylvie Lambert, Debraj Ray, Rohini Somanathan, Paolo Vanin, and the participants at several seminars and conferences for their useful comments.

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