Carol Graham of the Brookings Institute makes a powerful argument that a human’s ability to adapt to inhospitable conditions is a good thing for his or her psychological perspective but at the same time facilitates collective tolerance that leads to bad equilibrium. Humans can adapt to almost anything from poverty, unemployment, bad health, and high levels of crime and corruption. Adaptation is a very good thing, a human defense mechanism under unfavorable conditions.
The danger arises when this adaptability leads to surrender. Rather than attempting to change an all but intolerable condition, people collectively assume, and expect, that such a condition is merely a constraint that they have to live with.
Tolerance, such as is evident in the way our citizens approach the dreadful daily traffic of Jakarta, has led us to a bad equilibrium. While individually one can develop a human defense mechanism to cope with traffic jams (installing good audio systems in their cars, carrying the most current mobile gadgets or changing hours of work), the social costs of traffic jams are enormous. Every year in Jakarta billions of dollars are wasted on fuel and lost working time due to traffic, not to mention the costs associated with the increased stress of urban life.
The key to harnessing the power of human adaptability is to invoke strong disincentives and to create a collective expectation regarding what are good and bad behaviors. In particular, socially bad behaviors should be codified and harsh punishment consistently applied to offenders. The essence of such a state is that the rule of law is strongly observed and enforced.
He makes a fine point. I wasn't familiar with Carol Graham, but I am interested to learn more. This paper looks like a good place to start.