Abstract: The use of social sanctions against behaviour which contradicts a set of informal rules is often an important element in the functioning of informal institutions in traditional societies. In the social sciences, sanctioning behaviour has often been explained in terms of the internalisation of norms that prescribe the sanctions (e.g. Parsons 1951) or the threat of new sanctions against those who do not follow sanctioning behaviour (e.g. Akerlof 1976). We present an alternative to these theories, that offers insights about the persistence of social norms and the manner in which they may evolve. Our underlying assumption is that people derive utility from ostracising those who they believe to have 'bad character' but there is uncertainty and learning about how the character of a person may be inferred. Using this framework, we can account for both social norms that persist for long periods and unravel suddenly and those that evolve gradually over time. We apply the model to explain the phenomenon of persistent low labour market participation of women in Bangladesh.

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