From - Economists View

Financial Community Norms
Bill Easterly:

Rulers, communities, and revolution, by Bill Easterly: ...Some have had a simplistic view of institutions in development as deriving only from top-down formal rules and laws. ...[M]uch research indicates otherwise.

First, formal rules that are incompatible with community norms often have no effect (this extends to things like trying to have registered land titles when the local community already has customary allocation of land rights, research on paper land titles in Africa confirms they have little effect on anything).

Second, if the rulers are especially oppressive they could enforce the incompatible formal rules by force, which would make communities worse off. But in a free society, the community can resist the rulers, which is part of the benefit of a free society.

Third, most rules we live by in a free society are more the product of community norms than they are of formal laws. (Fancy version: Rules emerge out of complex social interactions in a spontaneous order.) This is a good thing, as it makes the rules more responsive to local circumstances and needs. Down with arbitrary rules, up with community norms.

There's a lesson here for regulation. It's not enough to change the rules. If the culture doesn't change to support those rules, the rules won't be effective.