Importance of Conscience in Total Factor Productivity: An Economic Model

Harashima, Taiji (2025): Importance of Conscience in Total Factor Productivity: An Economic Model.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: The benefit of group membership Conscience; Democracy; Dictatorship; Economic efficiency
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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