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Kautilya’s Arthashastra

The Arthashastra is a Sanskrit book on statecraft, political science, economic policy, and military
strategy written in ancient India. The text's author is typically assigned to Kautilya, also known as
Vishnugupta and Chanakya. Emperor Chandragupta Maurya's instructor and guardian was the
latter, a scholar at Takshashila.

Arthashastra means the science (sastra) of wealth/earth/polity (artha). ‘Artha’ however is bit
wider and an all-embracing term with variety of meanings. In ‘Arthashastra’ itself it is being used
in various contexts, points out L N Rangarajan in his translation of Kautilya —Arthashastra. It is
used in the sense of material well-being, in livelihood, economically productive activity trade etc.
This is bit similar with ‘wealth’ which is defined in ‘Wealth of Nations’. In rather simple way,
‘arthashastra’ can be defined as ‘science and art of politics and diplomacy’. This treatise is divided
into sixteen books dealing with virtually every topic concerned with the running of a state –
taxation, law, diplomacy, military strategy, economics, bureaucracy etc. The book is a
masterpiece which covers a wide range of topics like statecraft, politics, strategy, selection and
training of employees, leadership skills, legal systems, accounting systems, taxation, fiscal
policies, civil rules, internal and foreign trade etc. Arthashastra advocates rational ethic to the
conduct of the affairs of the state. The emphasis is on codification of law and uniformity of law
throughout the empire. In this essay we shall try to explore Kautilya’s views on legal systems,
justice and king’s role in maintaining law and order as discussed in Arthashastra by Kautilya
himself.
Arthashastra

• The Arthashastra is a treatise on politics, economics, military strategy, state function,

and social organisation attributed to the philosopher and Prime Minister Kautilya (also
known as Chanakya).
• The Arthashastra is said to have been authored by Kautilya as a manual for Chandragupta,
teaching him on how to rule a kingdom and promoting direct action in dealing with
political issues without regard for ethical considerations.
• Both Hinduism and the practicality of the Charvaka philosophical school, which rejected
the supernatural parts of the faith in favour of a totally materialistic view of the universe
and human existence, inform the Arthashastra.
• Charvaka believed that only direct perception of a phenomenon could establish reality,
and hence promoted a practical approach to life that encompassed logical, reason-based
action in reaction to situation.
• Whether it comes to topics like when and how a monarch should assassinate family
members or competitors, or how to consider foreign states as foes competing for the
same resources and power as oneself, and how to neutralise them most effectively, the
Arthashastra follows the same path.

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• The Arthashastra, written 1500 years before The Prince, is still studied today for its
rational presentation of statecraft and effectiveness in arguing for the State as an organic
entity best served by a strong leader whose primary duty and focus should be the welfare
of the people.

Arthashastra - Origin

• The text itself mentions three authors: Chanakya, Kautilya, and Vishnugupta; some
scholars believe they are three different people, while others believe they are all the same
person.
• According to this theory, Kautilya/Chanakya was his family name and Vishnugupta was
his given name. Scholars agree that this claim is true, observing that, while each name
appears separately at different places in the books, they all plainly relate to the same
person in one of them.
• Artha does not only refer to politics, military strategy, economics, animal husbandry,
marriage, or any of the other topics covered in the Arthashastra's fifteen books.
• The pursuit of worldly goods, personal prosperity, stability, and social position is referred
to as Artha.
• As a result, these alleged early artha shastras could have dealt with a variety of topics
along these lines, including politics, but there is no reason to believe that the current work
is simply a modification of earlier works.

Arthashastra - Influence

• The philosophical school of Charvaka, which originated around 600 BCE and is attributed
to a religious reformer named Brahaspati, had the most direct influence on the
production of the Arthashastra.
• Charvaka abandoned all religious authority and scripture in favour of relying on one's own
sense to determine truth.
• It rejected the existence of anything that cannot be perceived with the senses and
promoted pleasure as the highest value in life.
• Though it never became a formal school, its philosophy had a significant influence in
developing an intellectual landscape of pragmatism and objective, reasonable responses
to phenomena separated from religious thought's supernatural viewpoint.
• The formation of the kind of vision portrayed in Arthashastra was aided by this
atmosphere, but it is widely assumed that this vision was unique to Kautilya/Chanakya as
part of his ambitions to forge a pan-Indian kingdom led by the kind of powerful ruler he
groomed Chandragupta to be.

Arthashastra - The Welfare state

• Arthsashtra lays the intellectual basis for India to become the world's first welfare state.
• He advocated for welfare in all areas. He didn't just talk about human wellbeing; he also
talked about animal welfare.

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• He advocated for the protection of livelihoods, the poorer sections of society, consumer
protection, and even the welfare of convicts.
• The King's dharma is to defend his people in a reasonable, fair, and liberal manner.
• The perfect king, according to Kautilya, is "ever engaged in advancing the welfare of the
people and who endears himself by benefiting the public and doing right to them."
• Kautilya is not primarily concerned with wide political theory on the genesis and nature
of the state, and his innovation is not found in the monarchy of abstraction.
• The treatise is a compilation and summation of previous Arthasastra texts.
• Of the three purposes of human existence, virtue, riches, and enjoyment, Kautilya
prioritises wealth, but he is constantly conscious of religion's and ethical rules' utilitarian
usefulness in sustaining society's structure.
• Despite the significance he places on the position of the monarch, Kautilya is pragmatic
in his approach and would prioritise the component of domination that is most important
at any given moment.

Arthashastra - Good Governance

• Governance encompasses all facets of a country's administration, including its economic

policies and regulatory structure.
• According to Arthashastra, effective governance is associated with peace and order,
which may be achieved via the collaboration of many forces in a society.
• The leader is the first of these elements. The leader is held accountable for everything
that occurs in a community.
• In Indian civilization, the leader or king plays an important role since he is the one who
leads the nation and hence must exhibit many values.
• Kautilya was well-versed in several facets of governance, including taxation, diplomacy,
commerce, business, and administration.
• It is also said that he was well-versed in medicine and astrology. It is a political economy
discourse similar to Machiavelli's.
• The Arthashastra discusses numerous attributes that characterise a successful leader,
with a focus on honesty and accountability.
• As corruption devastated Indian society during his time, Kautilya placed a high value on
this issue. Even with the passage of time, dishonesty persists in today's culture.
• Political and economic governance were intertwined in the Arthashastra.
• Economic governance is the goal, while political governance is the means.
• However, if economic objectives are not recognised in the absence of political objectives,
political governance becomes an aim and economic governance becomes a means.
• 'The aim justifies the means,' is said to be the foundation of Kautilyan ideas. The means
and purposes of governance are political power and material prosperity.
• And successful governance, whether political or economic, is dependent on justifying the
aims and methods in light of the socioeconomic, economic, and political situations.

Arthashastra - Foreign trade

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• Foreign trade is an essential component of every economic system. Kautilya
acknowledged that overseas commerce in products and services is a primary source of
governmental wealth accumulation.
• He stated that international commerce should be encouraged by giving incentives such
as tax exemptions to allow foreign traders to prosper.
• He placed a high value on imports. He went on to say that overseas commerce helps to
enhance the supply of things that may not be available domestically.
• Imports allow a country to receive commodities from overseas sources at a lower cost.
• In this approach, he developed a perspective of foreign commerce based on comparative
advantage.
• The Arthashastra encourages international trade and encourages the monarch to
participate in it through his trade overseer.
• He should allow concessions to stimulate the import of items manufactured in other
nations.
• And those who transport such goods via sea. He should exempt them from taxes, allowing
them to earn a profit.

Arthashastra - Taxation

• Kautilya implies a linear income tax in a roundabout way. He emphasises justice, tax
structure stability, fiscal federalism, avoiding heavy taxes, maintaining tax compliance,
and subsidies to stimulate capital development.
• Many postulates of Kautilya's concept of political economics remain applicable to present
times.
• He favoured restricting the State's taxing authority, having modest tax rates, maintaining
a steady increase in taxes, and, most crucially, establishing a tax system that maintained
compliance.
• Ideally, the government should collect taxes and provide social services.
• Kautilya's taxation system had components of taxpayer sacrifice, direct benefit to
taxpayers, revenue redistribution, and tax incentives for desired investments.

Arthashastra - Growth Oriented Public expenditure

• Kautilya believed that the majority of tax income should be spent on creative endeavours
and public welfare.
• He argued that the state should spend money on things like national defence, public
administration and the salaries of ministers and government departments, the upkeep of
national storehouses and granaries, the upkeep of armies, and the acquisition of valuable
gems, stones, and ornaments, with the remainder going to the treasury.
• It is explained in Arthashastra that law was not considered just as a rule of prohibition,
nor was it restricted to the remedial justice of law courts.
• Its scope was greater than that of ethics, and institutions were the invention of law, while
traditions and customs relied on its penalties.

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• It developed all philosophies of society, and law was interwoven with religion, morality,
and public opinion, and by its subtle operations, it subordinated society to its will.
• The function of law in society was to bring about just order, and the extraordinary mission
was to be carried out by the King and his subordinates.

Arthashastra - Western Perspective

• The influential treatise, Arthashastra, discovers issues of social welfare, the collective
ethics that hold a society together, advising the king that in times and areas distressed by
famine, epidemics, and other acts of nature, or by war.
• He should initiate public projects such as building irrigation projects, fortifying major
strategic holdings and towns, and exempting those affected from taxes.
• The work had a strong influence on subsequent Hindu literature, such
as Manusmriti's sections on the monarch, governance, and legal procedures.
• The Arthashastra was composed around the end of the fourth century BC, but it does not
appear to have been rediscovered until 1905, after centuries of obscurity.
• However, despite the fact that his study of the subject was likely the most complex and
extensively based worldwide until Adam Smith released his Wealth of Nations in
1776, the importance of Kautilya on economics has been overlooked by western
academics.

Arthashastra - Significance

• The book, written in Sanskrit, explains theories and concepts of state governance.
• Kautilya created an immensely important imperative: government, polity, politics, and
progress must all be tied to people's well-being.
• It is clear that while the vocabulary used in Arthashastra may have varied, the nature and
role of the state in the economic system appear to remain consistent in all situations.
• It is a book of law and a treatise on administering a country that is still relevant today,
covering numerous issues on administration, politics, and economics.
• His ideas are still widely held in India today.
• He provided a valued foundation for economic science. It contains highly valuable
economic insights on international commerce, taxation, government spending,
agriculture, and industry. Stability and good governance are inextricably intertwined.
• There is stability when rulers are responsive, responsible, removable, and recallable.
Otherwise, there is ambiguity.
• He suggested that hefty taxes be avoided. If tax rates are too high, the people will be
unwilling to pay the tax and will seek out ways to avoid paying it.
• The fundamental focus of Kautilya's economic ideas is social welfare. The state was
obligated to assist the impoverished and defenceless, as well as to be proactive in
contributing to the well-being of its residents.
• Kautilya placed a greater focus on human capital generation, which is important in
today's world since progress is impossible without human capital growth.

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• It contains useful financial information. It may be used to illustrate numerous
contemporary economic ideas and can be utilised to demonstrate relevance to present
times.
• He proposed a variety of economic policy approaches to promote economic
development.

Kautilya

• Chanakya was a polymath from ancient India who worked as a teacher, author, strategist,
philosopher, economist, jurist, and royal counsellor.
• He is commonly recognised as Kautilya or Vishnugupta, the author of the Arthashastra,
an ancient Indian political treatise written during the fourth and third centuries BCE.
• As a result, he is regarded as a forefather of political science and economics in India, and
his work is regarded as an essential forerunner to classical economics.
• His writings were lost towards the end of the Gupta Empire in the sixth century CE and
were not found again until the early twentieth century.
• Around 321 BCE, Chanakya aided the first Mauryan ruler Chandragupta in his ascent to
power and is usually regarded with helping to build the Mauryan Empire.
• Both Chandragupta and his son Bindusara appointed Chanakya as their top counsellor.
• Chanakya is credited with two books: Arthashastra and Chanakya Niti, commonly known
as Chanakya Neeti-shastra.

Courts of Justice , Legal Procedure and rules followed for civil and
criminal cases

Vishnugupta Chanakya Kautilya wrote a treatise called The Arthashastra, which means

‘science of wealth’1. It contains three parts, which deal with issues related to economic

development, administration of justice and foreign relations. It has 150 chapters, which are

distributed into fifteen books. Books three, which has 20 chapters and four, which has 13

chapters, are devoted to the administration of justice. Kautilya’s Judicial System called

‘Dandaniti’, ‘the science of law enforcement’ is an important part of The Arthashastra.

Kautilya codified, modified and created new laws related to: loans, deposits, pledges,

mortgages etc., sale and purchase of property, inheritance and partition of ancestral

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property, labor contracts, partnership2, defamation and assault, theft and violent robbery,

and sexual offenses. He dealt with law and justice issues relating to both the civil law and the

criminal law. He offered a truly comprehensive system of justice, which not only incorporated

all the salient elements of a twenty first century system but also contained a few additional

invaluable insights.

• Kautilya’s Arthashastra discusses many issues, which are currently under intense

research3. His contributions relating to law and order issues may be classified under three

headings: (a) Importance of the Rule of Law: According to Kautilya, existence of law and

order was a pre-requisite for economic growth4. He (p 108) believed, “The progress of

this world depends on the maintenance of order and the [proper functioning of]

government (1.4).” He continued, “Unprotected, the small fish will be swallowed up by

the big fish. In the presence of a king maintaining just law, the weak can resist the

powerful (1.4).” Kautilya argued that corruption retarded economic growth by siphoning-

off resources and by adversely affecting law and order. He (p 286) listed corruption and

greed among the causes of loss in tax revenue implying a lower provision of public

infrastructure, which was essential to economic growth. Kautilya’s this contribution is

discussed in Balbir S. Sihag (2005a, 2006).

• (b) Laws must be clear, consistent and in a written form: Kautilya (p. 213) stated, “The rule

of kings depends primarily on [written] orders; even peace and war have their roots in

them [2.10]”. There are at least two reasons as to why Kautilya codified the laws 5. First,

many of the traditional laws were outdated or were insufficient to deal with the new

situation. As Charles Drekmeier (1962, p. 260) explains, “By the fifth and fourth centuries

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B. C. the ancient tribal institutions had lost their ability to regulate society effectively.

New modes of production, new types of social relationships, new salvation theologies

were changing the old ways. Kautilya was the theorist who most clearly saw the need for

expanded state authority to fill the ever-widening gaps left by the declining authority of

tradition.”

• Second, Kautilya was quite concerned about the possibility of green justice, that is, judges

accepting bribes in exchange for rendering favorable verdicts. He codified the laws and

introduced material incentives, such as efficiency wages to complement the existing

moral incentives to resolve the principal-agent problem. Recently, Edward L Glaeser and

Andrei Shleifer (2002) assert, “Codification emerges in our model as an efficient attempt

by the sovereign to control judges as his knowledge of individual disputes deteriorates (as

it did when the states and the economies developed). The simplicity of bright line rules,

and the possibility of verifying their violation, enables the king to use them to structure

incentives contracts for judges.” Additional analysis on this issue is provided in Sihag

(2004). It is difficult, however to put any specific label to Kautilya’s views since he

combined elements of historical, metaphysical, imperative and sociological schools of

jurisprudence.

• (c) Administration of Justice: His insights into the administration of justice are the focus

of the current study. According to Kautilya, effective law enforcement depended on (i)

Honesty of the Law Enforcers: Kautilya emphasized that the law enforcers themselves

including the king must be honest and law-abiding6. This is presented in section II. (ii)

Importance of Judicial Fairness: Similarly, he emphasized the standard of proof, prompt

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trials, minimization of Type I error, and implicitly the minimization of type II error (since

the king was required to compensate the victim if the crime was not solved). These issues,

which come under the rubric of judicial fairness, are presented in Section III. (iii)

Impartiality, proportionality and certainty of punishment: Kautilya’s uttermost emphasis

on impartiality, certainty and proportionality of punishment and discretion in sentencing

are provided in section IV. Kautilya preferred monetary fines to non-monetary

punishment and making sure that fines were paid-off. This and some other related issues

are collected in section V. Section I contains a brief introduction to Kautilya and a

justification for considering administration of justice as a worthy topic in the history of

economic thought.

Kautilya, wrote The Arthashastra - the science of wealth and welfare. He has been

credited with toppling the tyrant Nandas and installing Chandragupta Maurya (321 BCE-

297 BCE) on the throne. However, there is no reference to the emperor Chandragupta or

to his kingdom Magadha (state of Bihar, India) in The Arthashastra since, as mentioned

above, it was meant to be a theoretical treatise7. He was the prime minister (adviser) to

Chandragupta Maurya but he was an independent thinker. Jawaharlal Nehru (1946, p

123) describes Kautilya as: “He sat with the reins of empire in his hands and looked upon

the emperor more as a loved pupil than as a master. Simple and austere in his life,

uninterested in the pomp and pageantry of high position.”

• Date and Authorship of The Arthashastra: There has been a lot of controversy about the

date and authorship of The Arthashastra. Sihag (2004) provides a brief discussion on the

available evidence on this issue. He concludes, “Today, there exists no direct evidence

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against Kautilya being the sole author of The Arthashastra, nor evidence that it was not

written during the 4th century B.C.E.. The indirect evidence such as the writing style of

various segments of The Arthashastra, is insufficient to challenge either the date of its

writing or Kautilya as the sole author.”

• Administration of Justice as a part of History of Economic Thought: There are two

arguments for including legal issues into the history of economic thought. First, Robert

Dorfman (1991) notes, “Wealth of Nations was primarily a treatise on economic

development.” Adam Smith attached a significant role to the administration of justice as

a prerequisite to economic growth in the Wealth of Nations. Adam Smith (Bk. V, Ch. III, p

445) wrote, “Commerce and manufactures can seldom flourish long in any state which

does not enjoy a regular administration of justice, in which the people do not feel

themselves secure in the possession of their property, in which the faith of contracts is

not supported by law, and in which the authority of the state is not supposed to be

regularly employed in enforcing the payment of debts from all those who are able to pay.

Commerce and manufactures, in short, can seldom flourish in any state in which there is

not a certain degree of confidence in the justice of government.” The inclusion of

administration of justice in the Wealth of Nations is a sufficient justification to consider

this topic as a part of the history of economic thought. For example, Dani Rodrik, Arvind

Subramanian, and Francesco Trebbi (2004) begin their paper with the above quote.

Steven G. Medema (2004) brings out Sidgwick’s neglected but important contribution to

this field. Glaeser and Shleifer (2002) provide a theoretical explanation for the differences

between British and French legal systems (resulting in different outcomes, such as

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development of financial markets), which originated in the 12 th and 13th centuries.

Somehow many authors decided to publish in journals, which are not classified as history

of economic thought journals but clearly their contributions belong to the history of

economic thought.

• Second, according to Henry W. Spiegel (1991), the trend of broadening the scope of

economics started with Wicksteed. He (p 528) states, “His (Wicksteed’s) reference to the

‘the purposeful selection between alternative applications of resources’ was to resound

later in Robbin’s definition of economics as the science that treats of the allocation of

scarce resources among different uses.” He adds, “The elevation of the logic of choice to

an all-encompassing rule guiding human behavior in all its aspects has encouraged later

writers to claim for economics a far wider scope than is conventionally accorded to it.”

Similarly, both George J. Stigler (1984) and Edward P. Lazear (2000) label economics as an

imperial science because of its colonization of other disciplines such as: sociology, history,

political science, and law. Paul A. Samuelson (1968) describes the current scope of

economics quite aptly as, “Harriet Martineau, who made fairy tales out of economics

(unlike modern economists who make economics out of fairy tales).” Thus, according to

the current scope of economics, any analysis related to the administration of justice is a

part of economics implying that it automatically becomes a part of history of economic

thought also8.

• Finally, Warren J Samuels (2005, p 404) explains it very elegantly and succinctly, “Smith’s

system of social science with the three spheres of moral rules, market, and law, and so

on, neither component of a dichotomy or trichotomy is self-sufficient and independent

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of each other. They not only interact; they help change each other.” That is, ‘moral rules,

market and law’ are endogenous variables and therefore, administration of justice is an

integral part of any meaningful economic analysis including that of the history of

economic thought. Moreover, if a study of eugenics can be recognized as a part of history

of economic thought (Thomas C Leonard (2005)), administration of justice should also be

a part of history of economic thought since it has an equal if not a higher standing.

• The Arthashastra was written in Sanskrit but now its translations in English are available.

The interpretations, to a large extent, are based on L. N. Rangarajan’s translation of The

Arthashastra but in a few cases are based on R. P Kangle’s translation and only these are

explicitly indicated. Kautilya popularly known as Chanakya (the son of Chanaka) also

completed two other works: Chanakya-Sutras (Rules of Science) and Chanakya-

Rajanitisastra (Science of Government Policies).

II Kautilya on Corruption of Enforcers and Crime Deterrence

• King as a Role Model: Kautilya (p 121) stated, “A king endowed with the ideal personal

qualities enriches the other elements when they are less than perfect (6.1).” He (p 123)

added, “Whatever character the king has, the other elements also come to have the same

(8.1).” Kautilya expected a king to be like a sage. He (p 145) explained a sage king, “A

rajarishi [a king, wise like a sage] is one who: has self-control, having conquered the

[inimical temptations] of the senses, cultivates the intellect by association with elders, is

ever active in promoting the security and welfare of the people, endears himself to his

people by enriching them and doing good to them and avoids daydreaming,

capriciousness, falsehood and extravagance (1.7).”

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• Protection of Private Property Rights: According to Kautilya (p 121), “The wealth of the

state shall be one acquired lawfully either by inheritance or by the king’s efforts (6.10).”

He (p 231) wrote, “Water works such as reservoirs, embankments and tanks can be

privately owned and the owner shall be free to sell or mortgage them (3.9).”

• A Justification for Bureaucracy: Kautilya (p 177) observed, “A king can reign only with the

help of others; one wheel alone does not move a chariot. Therefore, a king should

appoint advisers as councilors and ministers and listen to their advice (1.7).” He (p 196)

added, “Because the work of the government is diversified and is carried on

simultaneously in many different places, the king cannot do it all himself; he, therefore,

has to appoint ministers who will implement it at the right time and place (1.9).”

• Principal-Agent Problem: Adolf A. Berle and Gardiner C. Means (1932) observed that there

was a separation of ownership and control in public corporations and suggested that

incentives were required to induce the CEO, the agent, to adhere to the objective of the

shareholders, the principal. Since then a considerable amount of effort has been devoted

to explore a whole set of mechanisms to resolve the principal-agent problem. However,

Joseph E. Stiglitz (1987, p 966) credits Stephen Ross (1973) for coining the term principal-

agent.

• According to Sihag (2005b), Kautilya “Recognized the principal-agent problem and

suggested various mechanisms to induce the agents to supply optimum effort, and also

not to collude, quarrel, steal or desert the king.” Kautilya recommended the payment of

an efficient wage (8000 panas, a square-shaped silver coin, which was a medium of

exchange and unit of account, whereas the lowest wage was 60 panas) to the judges to

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encourage honesty and efficiency. More than half a century ago, Frank H. Knight (1947,

p 62) observed, “In the liberal view, the individuals who implement state action do not

act as individuals, but are the agents of law, and the law is the creation of society as a

whole, of the “sovereign people,” and not of individuals.” Knight makes two important

points that: (i) the enforcers are just the agents of the state (he notes the principal-agent

problem), and (ii) the whole society consisting of ‘sovereign’ people creates the law.

Kautilya understood the principal-agent problem but the public did not directly create the

law. Although, Drekmeier (1962, p. 25) notes, “In conclusion, we may say that early Indian

kingship was broadly contractual, conceived of as a trust, subject to popular approval,

and, most important, subject to higher law and certain other restraints, normative and

practical. It was basically a secular institution.”

• Kautilya’s Insistence on Honest Enforcers as a Pre-requisite for Effective Law Enforcement:

Kautilya was acutely aware of the possibility that some law enforcers might resort to

extortion. He believed that honesty on the part of law enforcers was a prerequisite for

effective law enforcement. He (pp 493-494) asserted, “Thus, the king shall first reform

the administration, by punishing appropriately those officers who deal in wealth; they,

duly corrected, shall use the right punishments to ensure the good conduct of the people

of the towns and the countryside (4.9).” He (p 221) pointed out, “There are thirteen types

of undesirable persons who amass wealth secretly by causing injury to the population.

[These are: corrupt judges and magistrates, heads of villages or departments who extort

money from the public, perjurers and procurers of perjury, those who practice witchcraft,

black magic or sorcery, poisoners, narcotic dealers, counterfeiters and adulterators of

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precious metals]. When they are exposed by secret agents, they shall either be exiled or

made to pay adequate compensation proportionate to the gravity of the offense (4.4).”

He labeled them as ‘anti-social elements’ and recommended their elimination and

interestingly corrupt judges were in the list of the ‘undesirable persons’.

• Guidelines on Judicial Conduct: Kangle (Part III, p 215) notes, “The judges are called

dharmasthas, a name which apparently refers to the dharma or law, by which they are to

be guided in their work.” Kautilya provided a detailed set of guidelines to ensure the

judicial process to be fair and impartial. According to him (p 381), “A judge shall not:

threaten, intimidate, drive away or unjustly silence any litigant; abuse any person coming

before the court; fail to put relevant and necessary questions or ask unnecessary or

irrelevant questions; leave out of considerations answers relevant to his own questions;

give instructions on how to answer a question; remind one of a fact; draw attention to an

earlier statement; fail to call for relevant evidence; call for irrelevant evidence; decide on

a case without calling any evidence; dismiss a case under some pretext; make someone

abandon a case by making them tired of undue delays; misrepresent a statement made

in a particular context; coach witnesses; or rehear a case which had been completed and

judgment pronounced. All these are punishable offenses; in case the offense is repeated,

the judge shall be fined double and removed from office (4.9).”

• Kautilya offered a comprehensive list of ways in which a judge could affect the outcome

of a case. He believed that a judge must be competent and not compromise with the

judicial process to ensure impartiality. It is obvious that the judges themselves were not

above the law. Kangle (Part III, pp 221-222) observes, “Such treatment expected to be

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meted out to members of the judiciary strikes us today as being very strange. If judges

are themselves to be fined, the dignity that is expected to be attached to their office is

bound to disappear. The judges, in the scheme of this context, occupy a position

subordinate to the executive and are far from being independent of it.” However, there

was no other practical way to remove them since there did not exist any legislative body

to have hearings for the removal of corrupt judges.

• In fact, there were guidelines even for the judge’s clerk. Kautilya (p 382) wrote, “The

clerks who record statements made before the court shall: record the evidence correctly;

not add to the record statements not made; hide the ambiguity or confusion in evidence

badly given; make unambiguous statements appear confused; or change, in any way, the

sense of the evidence as presented. All these are punishable offenses (4.9).”

• Similarly, Kautilya was concerned about the dishonesty of other government officials. For

example, he (p 284) argued against an overzealous tax collector, “He who produces

double the [anticipated] revenue eats up the janapada [the countryside and its people,

by leaving inadequate resources for survival and future production] (2.9).” He (p 181)

suggested to the king, “He shall protect agriculture from being harassed by [onerous])

fines, taxes and demands of labor (2.1).” He advised the king to compensate the victims

and punish the corrupt officials. He (p 297) recommended, “A proclamation shall then be

issued calling on all those who had suffered at the hands of the dishonest official to inform

the investigating officer. All those who respond to the proclamation shall be

compensated according to their loss (2.8).” He (p 742) suggested, “Any official who incurs

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the displeasure of the people shall either be removed from his post or transferred to a

dangerous region (13.5).”

III Kautilya on Judicial Fairness and Minimization of Legal Errors

• Current discussion on issues related to judicial fairness is focused primarily on the

standard of proof and minimization of legal errors. Kautilya’s judicial system incorporated

all the essential ingredients of fairness in resolving disputes. These are explained below.

• Expedient Trials: The judicial trials were initiated very promptly, perhaps not to adhere to

the dictum that ‘justice delayed is justice denied’ but due to the belief of an increasing

unreliability of evidence as time passed. Kautilya (p 462) argued, “Because interrogation

after some days is inadmissible [unreliable?], no one shall be arrested on suspicion of

having committed theft or burglary if three nights have elapsed since the crime, unless

he is caught with the tools of the crime (4.8).” However, he (p 472) did state, “An offender

shall not go scot-free [just because of passage of time] (3.19).” He (p 386) suggested,

“The maximum time allowed for a defendant to file his defense shall be three fortnights

(3.1).”

• Standard of Proof: According to Kautilya (p 386), “[In any case before the judges]

admission [by the defendant of the claim against him] is the best. If the claim is not

admitted, then the judgment shall be based on the evidence of trustworthy witnesses,

who shall be persons known for their honesty or those approved by the Court. [Normally,]

there shall be at least three witnesses (3.11).” He (p 388) added, “In determining a suit

in favor of one or the other party, the following shall be taken as strengthening a party’s

case: statements of eyewitnesses, voluntary admissions, straightforwardness in

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answering questions and evidence tendered on oath. The following shall go against a

party: contradiction between earlier or later statements, unreliable witnesses or being

brought to court by secret agents after absconding (3.1).”

• A few remarks are in order. First, Kautilya’s goal was to prevent the incidence of crimes

and to ensure judicial fairness if a crime occurred. His conceptual framework offers a

reference point. For example, there was no jury, or a team of prosecutors or of defense

lawyers at that time. The simple question is: has this institutional change improved upon

the delivery of justice? According to Kautilya, judicial fairness depended on the amount

of evidence and its reliability. Obviously non-availability of statistical methods at that

time was not a big handicap in measuring the reliability of the evidence. Since objective

measures of probabilities regarding the accuracy of evidence were available neither

during the fourth century BCE nor they are available now. Most likely the judge formed

some subjective measure of reliability and similarly even today every judge or juror has

to form some subjective measure of reliability of evidence. That is why a concerted effort

is made both by defense and prosecution to appeal to the juror’s emotions to influence

his/her subjective measure of reliability. Second, Kautilya considered the ‘number of

witnesses’, that is, the amount of evidence also in deciding a case. Usually, nowadays the

prosecutor stresses the ‘mountain’ of evidence whereas the defense questions its

reliability, that is, tries to create a reasonable doubt. According to Kautilya, witnesses

must be independent and known for their honesty implying that the current practice of

allowing testimonies of biased and paid expert witnesses or of convicted jailhouse

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inmates may be helpful in convicting the innocent or setting the guilty free (i.e. in

committing legal errors) but not necessarily in the delivery of justice.

• Kautilya (p 462) recommended, “Anyone arrested shall be interrogated in the presence

of the accuser as well as witnesses from inside and outside the house of the accuser (4.8).”

He (p 463) asserted, “A suspect may admit to being a thief, as Ani-Mandavya did, for fear

of the pain of torture. Therefore, conclusive proof is essential before a person is

sentenced (4.8).” Kautilya insisted on solid evidence for conviction (although the above

story is told a little differently in the Epic Mahabharata that a sage did not want to break

his vow of silence to declare his innocence but the implication is the same). Kautilya (pp

464-65) offered a detailed discussion on forensic evidence for establishing the cause of

death. However, he (pp 466-467) did recommend torture to elicit confession but only in

those cases (excluding the sick, the minors, the aged, the debilitated, the insane, those

suffering from hunger, thirst or fatigue after a long journey and a pregnant woman) where

there was a strong suspicion of guilt. He (p 467) cautioned, “A person can be tortured

only on alternative days and only once on the permitted days. Torture shall not result in

death; if it does so, the person responsible shall be punished (4.8).” It may be noted that

the accused was to be questioned in front of the accuser implying that Kautilya would not

have approved the current practice of giving a choice to the accused whether to take the

witness stand or not.

• Punishment for Perjury: Perjury was a punishable offense. Kautilya (p 388) stated,

“Witnesses are obliged to tell the truth. For not doing so, the fine shall be 24 panas and

half for refusal to testify (3.11).”

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• Futility of Witness Tempering: Kautilya (p 389) added that if a party to a suit “conspires

with witnesses by talking to them in secret when such conversation is prohibited (3.1)”

would be an adequate ground against the party.

• Cost of Type I Error: Kautilya (p 493) wrote, “An innocent man who does not deserve to

be penalized shall not be punished, for the sin of inflicting unjust punishment is visited on

the king. He shall be freed of the sin only if he offers thirty times the unjust fine (4.13).”

According to Kautilya, convicting an innocent person was a ‘sin’, that is, an ethical lapse

and also a huge monetary loss (‘thirty times’) for the state.

• Cost of Type II Error: Kautilya (p 437) suggested, “If a King is unable to apprehend a thief
or recover stolen property, the victim of the theft shall be reimbursed from the Treasury
(i.e. the king’s own resources). Property [unjustly] appropriated shall be recovered and
returned to the owner; otherwise, the victim shall be paid its value (3.16).” Two remarks
are in order. First, a much broader and more relevant definition of Type II error is
discernible from Kautilya’s statement. Since he did not make a distinction between the
guilty who were arrested but not convicted and those guilty defendants who had evaded
arrest (this is explained below). Whereas the commonly advanced definition of type II
error is confined only to the guilty defendants who are arrested but not convicted due to
lack of sufficient evidence against them. Second, at that time, no private insurance
policies (a case of missing markets) were available against the possibility of loss caused
by theft and burglary and the king was asked to fulfill this role. Consequently there was a
built-in incentive to prevent crimes from happening and solving them if they happened
otherwise the king had to compensate for the loss. Certainly a market for insuring such
losses has been created, which is a good thing but in the process the built-in incentive to
prevent and solve such crimes has been lost. The following numerical table may be used
to make Kautilya’s definitions of Type I and Type II errors explicit10

Kautilya on the Optimum Level Of Punishment

Role of the Judge: In the absence of a jury, a defense lawyer and a prosecutor, there was

a very heavy burden on the judges and magistrates to keep legal errors to the minimum. Kautilya

(p 377) expected, “Judges shall discharge their duties objectively and impartially so that they may

earn the trust and affection of the people (3.2).” And in return, as mentioned above, Kautilya

recommended a decent salary of 8,000 panas for a judge (magistrate).

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Guidelines on Sentencing: Kautilya recommended a set of guidelines relating to

sentencing. It is obvious that fairness is not a modern notion since mankind has been concerned

with it for a long time13. It is considered one of the pillars on which human civilization rests.

Kautilya (p 377) wrote, “A king who observes his duty of protecting his people justly and according

to law will go to heaven, whereas one who does not protect them or inflicts unjust punishment

will not. It is the power of punishment alone, when exercised impartially in proportion to the

guilt, and irrespective of whether the person punished is the King’s son or an enemy, that

protects this world and the next. (3.1).”

The above statement indicates that Kautilya emphasized the critical role of punishment

in deterring crimes and understood that to be effective, the punishment must be certain,

impartial and in proportion to the severity of the crimes. Kautilya (p 108) elaborated on this

theme, “Some teachers say: ‘Those who seek to maintain order shall always hold ready the threat

of punishment. For, there is no better instrument of control than coercion.’ Kautilya disagrees

[for the following reasons]. A severe king [meting out unjust punishment] is hated by the people

he terrorizes while one who is too lenient is held in contempt by his own people. Whoever

imposes just and deserved punishment is respected and honored. A well-considered and just

punishment makes the people devoted to dharma, artha and kama [righteousness, wealth and

enjoyment]. Unjust punishment, whether awarded in greed, anger or ignorance, excites the fury

of even [those who have renounced all worldly attachments like] forest recluses and ascetics, not

to speak of householders. When, [conversely,] no punishment is awarded through misplaced

leniency and no law prevails, then there is only the law of fish [i.e., the law of the jungle] (1.4).”

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According to Kautilya, punishment up to a point helped law and order situation but

beyond a certain level it was likely to hurt it. He believed that judicial fairness was absolutely

essential to the survival of a state. It means that the implication of Becker’s model that ‘catch a

few and hang them’ may not reduce crimes. Almost all the studies on crime and punishment

assume that social and political stability are unaffected by the level of punishment. However,

both Kautilya and Adam Smith questioned this assumption.

Kautilya on Balance between Rules and Discretion: Kautilya provided a detailed list of

sanctions matching the severity of different crimes. However, the judges were permitted some

discretion. He (p 493) suggested, “The special circumstances of the person convicted and of the

particular offense shall be taken into account in determining the actual penalty to be imposed

(3.2). Fines shall be fixed taking into account the customs (of the region and the community) and

the nature of the offense (2.22). Leniency shall be shown in imposing punishments on the

following: a pilgrim, an ascetic, anyone suffering from illness, hunger, thirst, poverty, fatigue from

a journey, suffering from an earlier punishment, a foreigner or one from the countryside (3.20).”

According to Kautilya, a judge should take into consideration both the mitigating and the

aggravating (egregious) circumstances and the characteristics of the defendants in the

determination of the punishment.

The current debate on rules versus discretion is mostly about the polar cases, that is,

whether to have rules or to have discretion. In Kautilya’s scheme of things, rules were like focal

points (or guide posts) around which discretion had to be tailored. Too many rules and strict

adherence to them might deny gains from changed circumstances or other unexpected

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opportunities and similarly, too much discretion might lead to substantial abuses14 and

opportune behavior which, might result in erosion of credibility.

V Kautilya on Other Related Issues

Kautilya’s Preference for a Monetary Punishment: Kautilya recommended monetary

punishment over non-monetary ones and also the ‘penal slavery’. In fact, at that time

imprisonment as a punishment did not exist. Prisons were used simply to hold the defendants

temporarily for the duration of the trial. Kautilya proposed long lists of different kinds of physical

punishments or monetary fines. However, if the convicted person wished, physical punishments

prescribed for non-serious crimes could be substituted with monetary fines. For example,

according to Kautilya (p 495), a convicted person could pay 54 panas to spare the mutilation of

his thumb and forefinger or the tip of his nose. Kautilya (p 490) suggested that convicted persons

were released from prison only ‘if they had paid off, by their work15, the amount owed by them’

or ‘after receiving a payment for redemption’ or redeemed by charitable persons (2.36).

Crime Deterrence through Parading the Thieves: Kautilya (p 221) recommended, “When

thieves and robbers are arrested, the Chancellor shall parade them before people of the city or

the countryside [as the case may be] and proclaim that the criminals were caught under the

instructions of the King, an expert in detecting thieves. The people shall be warned to keep under

control any relative with criminal tendencies, because all thieves were bound to be caught [like

the ones paraded before them]. Likewise, the Chancellor shall parade before the people forest

bandits and [criminal] tribes caught with stolen goods as proof of the King’s omniscience (4.5).”

Clearly, the policy of parading the thieves was intended by Kautilya to increase the perceived

probability of catching them.16

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It is interesting to note that in the case of government officials, who stole property of

other than that of the king, Kautilya (pp 302-3) recommended ‘shaming’ in lieu of monetary fines

as punishments. He suggested ‘smearing with cow dung in public’, ‘smearing with cow dung and

ashes in public’, ‘parading with a belt of broken pots and exile’ or ‘shaving off the head’ as the

amounts of thefts increased in lieu of monetary fines of 3 panas, 6 panas, 12 panas and 24 panas

respectively.17

The Four strikes and you are Out Rule: Kautilya (p 493) recommended, “In all cases, the

punishment prescribed shall be imposed for the first offense; it shall be doubled for the second

and trebled for the third. If the offense is repeated a fourth time, any punishment, as the king

pleases, may be awarded (2.27).”

Protection of Whistle Blowers: Kautilya (p 298) suggested, “Any informant, to whom an

assurance against punishment has been given [even if he had participated in the fraud], shall, if

the case is proved, receive [as reward] one-sixth of the amount involved; if the informant is a

state servant, one-twelfth. If the case is proved, the informant [shall be permitted to escape the

wrath of the guilty and] may either remain in hiding or attribute the information to someone else

(2.8).”

State Representation of the Helpless: Kautilya did show compassion for the helpless. He

(p 385) stated, “The judges themselves shall take charge of the affairs of gods, Brahmins, ascetics,

women, minors, old people, the sick and those that are helpless [e.g., orphans], [even] when they

do not approach the court. No suit of theirs shall be dismissed for want of jurisdiction, passage

of time or adverse possession (3.2).” Thus we find that he proposed a very comprehensive and

balanced approach to handle crime and punishment. Kangle (Part III, p 230) concludes it quite

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aptly, “This very brief review of the law found in Kautilya will, it is hoped, show how it has been

treated by him in the most systematic manner. The treatment is also as full as possible.”

VI Conclusion
Built-in Fairness and Deterrence: Kautilya’s goal was to attain a crime-free society but the

‘the removal of thorns’ was to be achieved only by resorting to legal means. He proposed a

judicial system, which had built-in-fairness and crime deterrence. If a crime was not solved, the

king had to compensate the victim. So there was an incentive to prevent a crime from happening

and to solve it if it was committed. Similarly, there was an incentive not to commit a Type I error

in solving the crime since the king had to pay thirty times the amount of fine imposed on the

innocent. Thus there was a built-in incentive to minimize the costly errors of omission and

commission. According to Kautilya, monetary punishments imposed in lieu of physical

punishments must be collected.

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