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Kautilya on law, economics and ethics

  • Design
  • Economics
  • Law
  • Philosophy


Purpose – The purpose of this paper is to explore the status of economic analysis of laws relating to property and contracts during ancient times in India. Design/methodology/approach – Modern research tools are used to present Kautilya's ideas on contracts and property. Findings – Kautilya implicitly proposes a labor theory of property. He devised economic laws related to contracts, property and tort, which promoted economic efficiency and encouraged ethical behavior. Research limitations/implications – Current approaches ignore the role of ethics in designing legal rules for promoting economic efficiency. Practical implication – Unless laws are designed to encourage and promote ethical conduct optimum economic efficiency is unlikely to be achieved. Originality/value – Kautilya advocated a contract theory (between the ruler and the ruled), which was utilitarian in nature, however, unlike Bentham, he still appealed to the moral motivation.

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