RE-EVALUATING EMPEROR ASOKA :A Relational Contract Theory Explanation for Economic Transformation

Abstract

Emperor Asoka’s rein is considered an important era in ancient Indian history because of the vastness of his empire and the Buddhist elements in his administration. We propose that in addition to these reasons for highlighting Asoka’s rein, there is an important economic argument as well. It was during the century or two around Asoka’s rule that the subcontinent’s economy underwent a transformation from a simple pastoral-agricultural economy to a more mature economy with large scale production, specialisation and trade. The element that Asoka introduced into the social relations in his empire is Buddha’s Dhamma, which formed and strengthened relational contracts. A key feature of relational contracts is incompleteness of arrangements that is managed by social iterations and formal and informal enforcement mechanisms. Each of these is reflected in Asoka’s edicts, the earliest surviving writing samples from the subcontinent. Asoka planned for these measures to ensure political and economic stability. In addition, he also laid the most important foundational material in a rather unique way for all future economic transformations.