 I'm reading from Chinese Academy of Social Sciences, thanks a lot for the excellent presentation and the discussions. My question is that for the good law cannot be implemented. Sometimes it's because of a social structure or political system existing there. Sometimes it's because of social norms. Could Mr. Basu make further clarification? Let's see what is the function of a focal point if the law would change social norms. Thank you. Thank you. Thank you very much for an excellent presentation. I have two quick questions. The first one has to do with the fact that you said picking somebody's wallet may not necessarily be due to doing some cost-benefit analysis, but social norms may have a very important role to play. I will beg to differ on that because the whole idea here is that people may be doing cost-benefit analysis, but they will be factoring in the social norm. If we can calculate the psychic cost of guilt, shame, and then add that to the monetary cost of benefit of engaging in crime, we will be able to have better figures for our cost-benefit analysis. The second point is I would like to know your view on discretionary punishment, where judges are given big windows where they can make decisions as to whether to send someone to jail for one day or 25 years. I say this because in Ghana, people believe that judges are legally corrupt. They tend to jail people who are less privileged in society, more severely than those people who are at the upper end of the social ladder. And I took some data and did some analysis and then found out that if you look at the punishment people receive when they steal, as supposing that they are prosecuted, and then you try to look at that relationship with the total amount of money that is stolen, you realize that if you steal, let's say, 1% more, the punishment you receive reduces by 0.8%. So the incentive is there for you to steal more than to steal less. So what is your view on discretionary punishment for this concept? Thank you. Can you introduce yourself when you ask before asking your question? Sure, I'm Douglas Arendt from the National Renewable Energy Laboratory. I would love to hear some comments on your perspective on sustainability and sustainable development relative to both what I would call local public goods, but also the global commons and goods and what the interface is between law, social norms, and sustainability. Samuel Wangwe from Tasaniya, thank you very much for the very excellent exposure on these issues. I wanted to raise just two points. One is have you seen the role of information communication technologies in reducing the contact between the Breiber and the Breibi to see if that has played a role in some countries? Second, any comments on political corruption? Political corruption comes to especially where there's really high level of prettiness. People say we don't want corruption. This is really bad. And there are laws to actually curb corruption. But the same people who passed the law engage in very high level of corruption politically. Now the same people who say this is really bad are the same ones who do it. But if one of them falls out of favor, then they say, ah, corruption. We said corruption is bad. Political corruption, to me it seems, brings a new dimension in the whole discussion of corruption because it's those guys who are themselves passing laws, supervising, are the ones in the forefront. And in Africa in particular, maybe in other developing countries, this seems to be a complicated dimension to deal with, especially when it comes to administering development. I'll ask you to answer this first wave of questions and then we'll take more questions afterwards. Thank you. OK, let me go in order. Sorry, yeah. Yes, I will also actually, as I speak about this, I will go to build in a little bit onto this. I'll just take a call of what you're asking. Can laws be used to change norms? And in fact, that question relates to both what a little bit of what Ernest said and what Haroon said is before you, first of all, use laws to change norms. You have to be once a bit careful that norms have very often come into existence for some reason. And there's actually some analysis which is an evolutionary analysis of norms done by economists, which endorses what Ernest was saying about the case of no fishing on Tuesdays. Some of these norms could have socially desirable effects. So the norms have come into existence because societies that had these norms have replicated and done better. So before I'm answering a pre-question to your question that before you think in terms of changing a norm, you have to think a little bit about the norm's original role. Having said that, I also believe that there are many norms which came into reason, yes, for these functional historical evolutionary reasons, but societies change, but the norm stays on. And they become dysfunctional norms in society doing a lot of damage to society, but they are still there. There you do want to bring in the law to change. Two ways of doing that, one is to directly use the law to just outlaw that kind of norms-based behavior, but the other one actually now relates to what Haroun was saying is that certain laws can begin to change your mindset, but the minimum wage law is an example. Even if it's not being implemented, it begins to change the way you think, and there is a very important contribution, this is from a lawyer, Cass Sunstein. He talks about the expressionist function of law, that law often takes the form of, not actually it's the hard law what it says you'll do and the police coming and catching you if you don't, but it changes your mindset and the way you think about a question and that gets followed through that. So that's the way to approach social norms through law. The second question over there, the cost benefit, I think we are completely on the same page, just that we are using the language a bit differently. So when I said that it's not narrow cost benefit analysis, but social norms matter, what you're saying is that it is cost benefit analysis taking into account the fact that some of the costs are normative costs. I don't want to behave in certain way which will inflict stigma on me, and I completely agree with you. On the language, I can fuss a little bit about whether we should always use the language of cost benefit analysis. I do have some hesitation on that, but when I would do an exercise like this formally, I would I think do it exactly the way your suggesting should be done, that keep it as cost benefit analysis, but enrich the notion of what constitutes cost and what constitutes benefits and the norms and the social stigma could come in, agreed. On discretionary punishment and judges, this is a huge problem that in the end, even if you don't have discretionary punishment, which side has won that verdict the judge has to give? And there's a lot of scope for a judge to be corrupt and do something in favor of the richer client rather than the poorer client. This evidence that you said, I've never seen it, but it's fascinating that if you're stealing, steal a lot, your punishment will go down. It sort of fits in with some priors that that's possible. You become a bigger player and the punishment goes down. What do you do about that? I wish I had an answer, but all I will tell you is that this simply emphasizes once again that these kinds of problems of corruption, once you bring in the police, the judge and everyone, very often it's impossible to close it through pure cost benefit rational argument. The social norms are also very, very important. People having different norms in their head and that I'm going to relate. I'll come back to this just now in a moment and take the sustainability question and I'll return to this. Again, sustainability is such a big topic that for me to jump and immediately be able to relate to what I'm talking about with that I can't do, it will take me time, but I want to stress the last part of my talk which I did not manage to go into that for a lot of sustainability matters, again the human social norms are important and that brings me back to the previous question. To try to cure these problems entirely through taxation and benefits, you typically won't succeed, you can succeed with individuals, but the judge could be corrupt. So the norms are very important. All I can tell you how you change norms, I don't know, so I won't even pretend to say I know, but I do know that norms change and that gives me hope that human norms are malleable. Example, when in the West the norms started that you don't smoke in a public place. Initially you may have actually laws that if you smoke in a public place that you get punished by that. This was soon, there was talk that India would start that law that you don't smoke in a public place. And my initial thought was that it's impossible to correct this. I mean, it's too anarchic a society, too free-floating a society, making this a law, after all you can't have a police standing in each room and that police can get bribed, you'll never get it. The smoking norm in India changed over a 10-year period. No one lights up in a crowded room and you don't even need the law anymore. I feel a lot of our environmental behavior has to rely on human thinking changing. Trouble is we have very little understanding of what leads human thought to change. One of the reasons why we chose this year's World Development Report on this topic is precisely because of my own belief that the way we think the mental models we carry in our heads are extremely important and you cannot solve this entire problem from the petty criminal to the judge. You can't solve it all just by changing the punishments and jail terms, you won't do it. In the end, you do need to work on human norms and the first step in that is understanding and that's what we are trying to do. And finally, technology to reduce contact between briber and bribe, certainly, it's extremely important. And these very, very simple things have already began to change the landscape of a lot of corruption. One of the things that is being used in India in quite a sophisticated way is a biomarker system for identifying individuals. It's called the ADHAR program and this is being developed by some of the best software minds. Once this comes into place, again, the expectation is that for a lot of basic benefits, the human contact will be minimal. You will be recognized by your retina and your fingerprints and certain transactions will take place, money will move into your bank account by the recognition when you go and identify yourself. So that's very important. On political corruption, I have one word, one little thing I have to point out. Lot of political corruption, we have to simply understand, takes the form of barter. I do you a favor and you do me a favor. A lot of it, actually, money does not even change hand. It's just you're performing barter at the top of the country. And the popular belief that barter takes place amongst the poorest people, I'll give you one fish, you give me a little bit of rice. Yes, that does take place, but barter is much more prevalent at the top, at the political level. And that's another game because it is very often money is not changing hand. So you can't catch it through conventional means. So once again, this brings me back to the first point that I was making, that a lot of this has to depend ultimately on human social norms, no guarantee. I'm not a foolish optimist to think that someday all this will get cured, maybe it won't, but at least we begin to get some handles on how we do better and move inch towards that. Let's take another round of questions. Can you introduce yourself and then we'll do it. Thank you ma'am. My name is Salawadu Mkola from Nigeria. I think it's important to also look at the origin of law. Law in itself is not devoid of corruption. We lawmaker, the multi-objectives. And we've seen situation where some laws are not comfortable to lawmakers and they make the law weaker. Just to buttress the political kind of a problem that we have. Where you've seen a government that is not sharing money, being voted out of power. In other words, there is no way we can move on without this consultation, without excessive current stakeholders along. Again, we are back to the issue of norm and social order. Because when you have predominant people, not actually want to abide by a rule or order, where do we go from there? Because it's important you can combine democracy in some cases, but of course you need democracy to be able to move forward. Thank you. Thank you very much. I'm Peter Quartey from University of Ghana. Laws do not support development. And I think I tend to side with what Provost Aite said. But then I want us to, I want your view on this point that the lawmakers themselves leave a lot of room for interpretation. Again, for their selfish interest. And that does not promote development. I want your views on this point. Thank you. Thank you. I'm Fondi Chazibana from the National Treasury in South Africa. The one interesting thing to me is why do lawmakers often write laws that they can't implement? Which brings us into the area of credibility. Because that does undermine whether a law can be effective or not. If members of the public know that there's not enough resources to implement, we find this in South Africa with regards to municipal bylaws. You have these bylaws. But because things, you're contravening the law in your own house, in your own car, the cops can't find you, and therefore, you can go about sort of your usual day to day. Your usual day to day. The second question I've got is around an acceptable period to amend the law. So acceptable periods to amend laws, to take into account the development needs. When you've got this interest, because every time you make an amendment, it depends on who the strongest interest group is at the time. So you'll always have these moving targets all the time. So you're thinking, I'm achieving the greater good. But it's always the greater good of an interest, of whoever the strongest interest is at a particular period, like reflections. Thanks. Tony? Tony Addison from UNU, Wider in Helsinki. Koshik, we have a lot of young researchers here at the conference, and they're all thirsting to write great papers. So my question to you is, what topics should they be working on that are gonna produce those great papers? Thank you. Thank you very much. I am Patricia D'Amon from Nigeria. From the discussion of Professor Basu, is get towards the masses, the individuals, you know, the citizens trying to change the social norm. What about the lawmakers themselves, the government? You see, there has been cases, for instance, in my country, where somebody will steal a mobile phone, for instance, what, $50? And another person will steal from the government, public fund, what billions of dollars? And nothing is done to that. The one that steals $50 worth of mobile phone is jailed for seven years. And the man who takes six billions of dollars is actually reformed, maybe $3 million, and he goes cost-free. So what do we do? How do we change the norm of the public, I mean, government so that everything will work together well, and then we can now develop, I mean, there will be economic development in our country, thank you. On this farm of questions. Let me actually do the following. I'll take the question, accepting Tony, all the others, let me pull in, because actually you're asking very similar question. I understand where we are coming from. This is indeed very troubling. And you see this, the most blatant cases, very often it is true. There's no getting away from that fact that you see these in poorer countries in emerging economies, the most blatant cases. But this happens, corruption at the top in subtle forms, very often not changing money, subtle forms happen even in rich countries. The lawmaker could have certain kinds of vested interest. Since there were two questions from Nigeria, I suddenly remembered years ago, I had read this very beautiful piece by a writer, I may be getting the name wrong, Adewal Majapiers in London review of books, saying how in one case he got into a trouble with someone on some matter with a local citizen and called the police. And the police made them bid for the higher bribe that between the two of them that they would pay to the police. And the higher bribe person, the other person got a punch or two from the policeman and the policeman took away the bribe and went away. This is actually the same question. In this case it's the bribe, the police who's the enforcer, but you're taking the question one level higher up from your question on democracy to lawmakers to why do people make laws which are not good for society. It is all about the lawmakers. The trouble is I wish I had an easy answer, I don't. I mean this is very painful, I've seen this happen all the time and as I'm sort of warning you, it happens in a very blatant fashion in poorer countries, emerging economies. It happens in subtle ways even in rich countries. There is a bit of a collusion at the top which plagues the world. But in the end, I'm giving you, I know it's a very lame thought that I'm bringing to the table simply because I don't have an easy thought, is we have to make these things clear. Write about these that these things are happening. Ordinary people's realization that something is wrong and should not be the case leads to changed behavior. All I know about human social norms is realizing something is bad by ordinary people helps. And some of the worst injustices in life, and you can take it across countries, discrimination, racial discrimination in the United States, apartheid in South Africa, caste practices in India, you'll get examples galore. The way these things persist over time is you lull people into believing that what's happening is normal and correct. It's when that thought breaks down you realize that this is not normal. I've been lulled into believing that this is normal, that change comes. And I'm taking all the sort of questions that you're bringing on the lawmakers is making people aware that look, don't get lulled, that the lawmakers are the ultimate authority thinking of the social good. They are very often not doing that. And that kind of social activism to me is very, very important. You have to stop people from getting lulled into believing things are right. I can give you examples galore of how most of the biggest injustices in life continue simply because the person who suffers does not realize that it's an unjust suffering. You take it to be dished out from heaven or whatever and that's why you're there. So just the awareness is welcome. And now finally, to Tony's question, topics that students should work on. There's always a bit of a tendency to think of topics which are of interest to you, meaning to me. I didn't mean Tony interests to me and suggest those topics, but I can tell you currently the sorts of things which are of a great interest to me a couple of things I can tell you and I'm going a bit beyond this lecture. And this is of interest I hopefully to wider to the World Bank and all. One mistake I feel the microeconomics, macroeconomics divide has done in the policy making field where we do need a lot of fresh thinking. Very often when you have a program which is a micro intervention to help people. So some nutrition program running in a thousand villages in South Africa or Tanzania or somewhere or an employment guarantee program running in 5,000 villages in India. Where we usually, the way we usually analyze these is you send researchers, if they are sophisticated they'll do randomization, take some places where you have this intervention, other places where you don't, you see the effect of this. If you can't randomize, you just collect data in that village and see what has happened in that village. One huge mistake happens through this and where we need a bit of innovative research. Suppose you're running a program, I don't know some intervention in a thousand or 5,000 or 10,000 villages employment intervention or something else. Let us suppose you find that it's successful in these entire 5,000 villages. People's nutrition level has improved, poverty is less. Usually we end by saying that the program has succeeded. What is forgotten is to run a program like this in an economy has macroeconomic implications. You are, the fiscal deficit could be going up. You could be generating monetary expansion while you do this. And if you keep that in mind, it's entirely possible that in these 10,000 villages, the program succeeded. People have risen out of the poverty line but in another 50,000 villages which had nothing to do with this program where the side effect of this which is in terms of prices rising that reached and nothing else reached where more people have gone into poverty. One reason why poverty eradication is so hard. We have so many programs running. I believe it's because we have this cleavage between the micro and the macro analysis means we very often forget about the side effect which takes place 2,000 miles away in another village where these people are not there but through the macroeconomic channels and effect has gone over there. I've now come away from both my India experience and now that I work in the World Bank and see a lot of these programs. We have to begin to marry better the micro, macro bridge and that is what after all a profession is just going to the village and seeing people are better off anyone can do. You don't need a hard profession for that but the strength channels through which this can transmit and go elsewhere. The profession has given us certain tools of analysis. These tools are not easy. These macroeconomic analysis across sectors is difficult but this is a very important topic in an area where you can get a lot of impact coming out of that. So this is one broad area, the micro, macro divide and I've been trying to push the World Bank to do a little bit more of that. Another area, and this is of course comes a bit from my orientation. Historically economics was, two, three minutes more I can take over this. Historically, I do believe that economics had erred on the side of excessive theory. You just did theory, very little sense of the way the world is spanning out. It's very welcome that this has changed. The amount of data we are now generating around the world is huge. A lot of understanding coming out of this. But at times I'm worried that we should not make the mistake of pushing to the other extreme and doing a data, not data-based analysis but a data-waved analysis. You collect data, wave the data and then you go and implement some policy. Data-based analysis means when from the data you're going to a policy. You actually have to think a lot of what the data says. And that's where you do need some analytical thinking. And so I'm giving, I'm not giving you specific topics that I can give you over coffee after the break. But again, bringing some analytical thought into data-based analysis is extremely important. And I see all the time people will tell you that look, last 20 years this is what happened. You went in for this intervention, this is what happened. Therefore, and very quick jump to tomorrow we should do this. To me that therefore very often is a non sequester. It has no meaning. You've waved some data in front of my face and you've gone back to your prejudices. That therefore, that basing of the data needs much better analysis. And if the younger people there, well even the older people should try but all of us get usually set in our ways. It's very difficult to change our ways. The younger people could try to marry this as well, the data work and analytics before you jump to conclusions about what the data says in terms of policy. Thank you. Thank you very much Kershi. Thank you for the very challenging thoughts in your presentation. And we look forward to the new WDR certainly. And many thanks for your last thought about the new direction for research. Thank you also to Ernest and to Avon for their comments. And now let me conclude this session and call upon Fin who has a couple of things to tell us. Thank you very much.