After one eats in a restaurant, that one has to leave a tip is a social norm, and that one has to pay for the food is law. As is evident from this both norms and the law influence our behaviour. The goods that we buy, the food that we consume, the services that we render and the opinions that we express are all influenced both by the law and the norms of society. But in traditional economics there was little recognition of this fact. In recent years this has been changing and there have been several initiatives to integrate the analysis of norms and institutions with markets and the provision of public goods. This essay begins by discussing what social norms are and how they influence economic functioning and it tries to classify different kinds of social norms. It comments on the relation between norms and evolutionary processes, and the interconnections between social norms, the law and the state. It also addresses the much-discussed question: to what extent can social norms or voluntary community-based effort be a substitute for law?