Distortion of Resource Allocation by the Castes on Caste System in India

        The caste system in India interferes with proper resource allocation. This issue was first highlighted by Akerlof (1976, 1980). He asserted that the labor market introduced employment discernment against the lower castes, especially in resource allocation. Social atomization while providing public goods, is also a negative impact of the caste system. This example has adverse consequences on policy design because it's practical motive research on the castes. For instance, the availability of public resources is the main problem for the growth of economy and very critical, especially for communities that are still developing. The caste system misses their target by imposing rules that prevent some people from having access to public resources, policies and development programs which are target towards usage of public resources.

Power and Endogenous Segregation on Caste System in India

        Power is the ability to give a person privileges to opportunities which would otherwise not be reachable. In political science, this is known as the power of influence (Raven and French, 1958). This concept represents a big different type of powers, which include economic, religious and political. This power makes the powerless to see the additional advantage and benefit in socializing with the mighty. The cooperation increases the propensity of the powerless to work, and the powerful will, in turn, respond by increasing their propensity as well. The propensity prompts for an increase in cooperation, to a point where they will cooperate fully with the fully.

        This approach has some features that are compelling. First, this approach recognizes that societies that are segregated, usually exhibit power distribution that is highly unequal. Second, segregation is defined as a systematic denial of cooperation between two groups, and it encompasses several situations from geographical to marriage segregation. Segregation is always seen as the separation of two groups, based on their geographical location. It also reveals itself in other parts of life like conversation, behaviors, or even jokes. Third, this approach is very interesting, because the rejection happens due to the powerless struggle to cooperate. There are other examples that occur daily in our life which could illustrate this point.