Importance of Conscience in Total Factor Productivity: An Economic Model

Taiji Harashima

MPRA Paper from University Library of Munich, Germany

Abstract: Conscience plays an important role in reciprocal and altruistic behaviors because it restrains people from behaving totally selfishly, but why is conscience necessary? In this paper, I construct a model that describes the relationship between conscience and total factor productivity and show that a higher level of conscience in an economy increases its total factor productivity through an increase in the benefits of a society (or an economy) resulting from a smaller amount of various kinds of selfish behaviors and activities. Therefore, conscience is an important factor to achieve high economic efficiency. On the basis of this model, I discuss why total factor productivity in a country under the rule of a dictatorship could be half of that of a stably democratic country because a dictatorship will often prevail if the level of conscience of people in a society is very low.

Keywords: The benefit of group membership Conscience; Democracy; Dictatorship; Economic efficiency (search for similar items in EconPapers)
JEL-codes: D24 (search for similar items in EconPapers)
Date: 2025-11-01
New Economics Papers: this item is included in nep-eff
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