SOCIAL INCENTIVES AND THE ENFORCEMENT OF LAW: SOME REFLECTIONS

Abstract

This short essay looks at the ineffectiveness of laws to control dowry in India from a law and economics perspective. This starts with an understanding of the economic and social incentives to provide dowry. Ensuring the welfare of daughters through marriage (and not much through employment), and the struggle to get the 'best possible bridegroom’ play an important role in the increase in the dowry. This encouraged even communities that were not following this practice in the past to follow it currently. Hence there are private incentives for both givers and takers to continue with the practice and these work against the enforcement of the dowry prohibition act. Moreover, dowry is a private transaction. At the time of the transaction, both parties expect gains from it. However, these expected gains may not be realised after the transaction or there could be severe losses to one of the parties (mainly to the girl and her family). Parents may have an incentive to bring severe dowry harassment cases to the court, but givers and takers have little incentive to stop the practice or provide adequate information to law enforcement agencies if such a severe harassment is not taking place. This also works against the enforcement of the dowry prohibition act. Though the payment of dowry can be seen as part of an informal contract, there are limitations in using the contract law also against dowry. If the dowry prohibition act is somewhat ineffective in reducing, the paper highlights its possible benefits. These may include creating ideas of a desirable norm in society, and this role of law needs to be understood in detail especially in countries like India.