Spite and Development

An interesting review of a World Bank Policy Research Paper by Fehr, Hoff and Kshetramade(1) which argues that "given the lack of effective institutions in a developing country, the key ingredients in a success story are endogenous contract enforcement and the ability of ordinary citizens to resolve coordination and cooperation problems."(2).

There is an old joke that a container filled with indian crabs can be carried without the lid, since all the other crabs will pull back any one which manages to reach to the top to escape. In this paper they define 'Spiteful preferences' are defined as 'the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff.' It seems that the World Bank would now want to make Indians more cooperative for economic development.

An interesting part of their results is that this spiteful behavior is allegedly prevalent more amongst the higher caste than the lower and especially in the north of India.

The author concludes by saying that these findings are perhaps common knowledge to the native which I agree and also asks the question of what next. I have no idea but if I had I will definitely tell and won't be spiteful :)

(1)Fehr, Ernst & Hoff, Karla & Kshetramade, Mayuresh, 2008. "Spite and development," Policy Research Working Paper Series 4619, The World Bank. 

(2)http://www.rediff.com/money/2008/oct/31guest2.htm