The Change from Morality to Law and the Hypothesis of Institutional Specialization
The formal and informal institutions,as defined in New Institutional Economics,can be simply expressed as law and morality.In comparison with morality,the law has the following features:first,it provides more certainty,as the same offenses typically have similar penalties and enforcement;second,it is performed by specialized institutions and officials,such as police,judges,and lawyers;third,it is enforced through penalties,while morality is enforced through both penalties and rewards.According to criminal economics,individuals who violate the law or morality aim to benefit from their actions,with the cost being the potential penalties incurred.The penalties for violating the law include physical punishment(imprisonment),financial loss(financial compensation),social pressure,and conscientious self-blame.However,the penalties for violating morality only include social pressure and conscientious self-blame.It is evident that the cost of violating the law is much larger than that of violating morality.The division of social constraints into law and morality is based on a cost-benefit analysis.It is profitable to create an institution only when its benefit is larger than the cost of creating and enforcing it,and vice versa.The reason for leaving some constraints in the scope of morality is that the enforcement of law incurs costs.Creating a law is significant only when its benefit is larger than the cost of legislation and legal enforcement.For example,the reason that murder and robbery are prohibited by law in almost every part of the world is that the harm of these crimes is so significant that the benefit of preventing them far outweighs the cost of the relevant law enforcement.Conversely,to prevent spitting through law is not profitable because the harm of spitting is minimal,and the cost of stopping it is significant.The dividing line between law and morality is not fixed but changes with the deepening of the social division of labor.The general trend is that more and more moral constraints will be transformed into legal constraints as the social division of labor deepens.There are two motivations for this change:First,the deepening of labor division promotes population mobility and increases opportunities for contact between strangers,decreasing the effectiveness of traditional morality,which is more effective in communities.A good example is sexual harassment,which occurs less frequently in communities and more frequently in railway stations,airports,and malls,where there are many strangers.Second,the division of labor promotes technological progress,which decreases the cost of law enforcement.For instance,digital devices make it easy to record sexual harassment and decrease the cost of obtaining evidence.This paper refers to the phenomenon of moral constraints being transformed into legal constraints as institutional specialization.
Rationality of institutionsDivision and changes of morality and lawInstitutional specializationConvergence of institutions
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