Social norms, social capital, and the sustainability of small scale economies

This paper develops a conceptual model to link social norms and social capital with key socio-ecological characteristics of small scale economies in order to derive implications for the sustainability of natural resources and survival of these economies. Specifically, the extent of punishment required to deter defection is derived as a function of group size, rewards from defection, resource stock, and the risk of groundwater loss. Social norms which ordain collective participation and punishments can be endogenous, dynamic, and exhibit resilience. The implication of these possibilities on the sustainability of small scale economies is also evaluated.