May 16, 2009

Bring out the Champagne with a dash of Sedative

Filed under: Governance,Politics — Bottom's Up @ 12:05 pm

In an election where the choice was one of going for the least of all evils, the people of India has chosen magnificently. As someone who had become more and more cynical with the direction the people (and hence leaders) of India were taking her, this writer is truly delighted.

There are some trends here which are truly causes for hope. Of course the assertion that this is a mandate for a stable Government indeed has elements of truth to it. The communists , the Mayawatis  and the regional parties which were seen as either not up to the task of providing a stable Government or simply too disruptive and untenable for a stable Government have lost heavily. When it comes to the communists, it probably has been the major reason after their repeated rants of anti-Americanism and rigid stands on issues such as the nuclear deal. Similarly, Reddy’s huge win in the Lok Sabha elections in Andhra but few gains in the assembly elections point to the same trend. Maharashtra may fall in this bucket too. All of this, particularly the strong contrasts in Andhra, definitely speaks highly of the astuteness of the Indian voters.

A second trend is a vote for Governance. A careful look shows that despite its loss, the BJP did not really lose as much in terms of seats overall as the third front.It did do badly in places such as Rajasthan where its Governance was bad, but in other places where its Government did a good job such as Gujarat, it maintained and even expanded its lead. The Governance reward trend is true across parties and regions. Nitish Kumar has made a clean sweep in Bihar. HIs strength is that he is not only able to tap into identity polictics (a necessary evil in Indian politics) but he has not forgotten to follow it up with Governance. His was definitely not a big party though it had allied with the BJP. Similarly, in the former BJP stronghold of Delhi, again a performing Government of Sheila Dixit has been rewarded. On the other hand, the extremely poor levels of Governance in UP by Mayawati have been punished. This and stability allowed the Congress to make huge gains in UP. This focus of the voters on performance is probably one of the nest news of this elections and hopefully will serve to incentivize more state Governments to do their job.

A third trend that is being pointed out is one of this being a vote against extremist. I do not believe that as a first order effect this was important. For example. Gujarat is a prime example where extremism did not play in the equations and it was all about Governance. Nor did Modi’s presence in Maharastra for campaigning either help or hurt. Similarly, in many places where the BJP had won in the past, it continued to maintain its hold. However, there are two second order effects. In an era of coalition politics – something which is expected to be around – most regional parties were unwilling to touch the BJP with a nine feet pole. Their extremist tendencies cost them heavily in terms to getting allies at a time when they really needed allies. Though it may be partly opportunism on the part of Nitish, this may also play a part in his parting ways with the BJP. Another effect of its extremism was its inability to expand its base. To that extent, in the current political climate, Hindutva just did not fly beyond the established base. Again Maharashtra is a prime example where the Congress had a Government which is terrible but still won. It does mean that the BJP, if it needs to continue to be a national party and gain allies, needs to shed its extreme image and become a true center right party. Of course, when it comes to communal issues, things can quickly change.

All said and done, blunders and lack of a strategy by the third front and the BJP definitely played their part in the win of the BJP. However, it was as much a mandate for a party that was reatively (and I use ‘relatively’ strongly) better at providing Governance and stablity. Kudos to the Indian voter. However, with good news always come some bad. We are definitely looking at a stable Government and also promising trends in the attitude of the Indian voters. However, the BJP continues to look just as confused as it always was. This could mean that they decide to go further to the hard right, choose new leaders more alignemed with the new sangh and end up becoming even more marginalized. If this happens, the Congress would become the only dominant party in the country and after the era of the Indira Gandhi debacles, we know where that could lead.  Thus, this writer hopes that the BJP takes the right lessons and comes back as a stronger, more moderate opposition to the Congress. A second cause of worry is what this means for inner party democracy. The lack of inner party culture has grown over the years and the rise of Rahul Gandhi – the Congress is already attributing the entire UP success o him, a questionable claim – would do nothing to change that. The return of Mamata Banerjee, the win of the Congress in some places such as Maharastra despite non Governance are also unhealthy outcomes. Hopefully some of these fears will be assuaged with the rise of better oppositions.

For now though, given the cirstances and the options in front of the Indian voter, this is the best possible outcome. If this is not cause enough to bring out the champage, then nothing is.


August 9, 2008

Some More on Pigovian Taxation of Oil

Filed under: Economics,Governance,Politics — Bottom's Up @ 2:15 am

Business week has a nice article, which after everything is said and done, ends up advocating for some sort of Pigovian Taxation on Oil.  Something a lot of analysis against taxation of oil misses is the simple fact that at the moment there is no economic cost associated with polluting the air (through the use of oil et al). Thus if everyone is sharing the common resource which is our atmosphere, some economic cost should be associated with its use/misuse, i.e. the Pigovian Tax on Carbon emission. That is unless you are one of those who believes the earth to behave like a perfect black body which radiates all the heat entering its atmosphere back into space almost instantly, green house gases be damned.

While I am no tree hugger, I am one of those who is happy everytime the price of oil rises – demand reduces, alternatives become affordable and our moronic politicians in Washington see a little more reason to look at that crazy little thing called public transport. Thanks to this article, I feel much less of a tree hugger and in esteemed company.

Also, Greg Mankiw explains here why that absurdity of chopping off the pinkie of the invisible hand aka Windfall Profits Tax is hardly Pigovian. I wonder how much part Jason Furman, a former student Prof Mankiw’s and one of the top people along with Prof Goolsbee on Obama’s economic team, played in this policy. But then, polictics can make even economists change their belief – give the people what they want!

July 23, 2008

The Mess of the No Confidence Motion

Filed under: Governance,Politics — Bottom's Up @ 12:28 am

The UPA has just finished with a victory in the no confidence motion against it on the supposed issue of the Indo-US nuclear deal. Amid cries of Singh Is King, various issues are currently coming to mind and each of them adds to my disgust with our great leaders and my depression with Indian governance.

  1. The UPA Government has not disclosed all the details of the deal and time and again has not officially given any explanation on why the issues raised by the left about the 123 agreement and the Hyde Act are not pertinent from a legal and national security point of view. I still have not heard whether we will be able to have any nuclear tests in the future after this agreement and if not, why that is not important. What should have happened is that when there is so much controversy, the Govt. should have invited some leaders of the opposition and various other parties and addressed their concerns in a transparent and (semi)public debate on the issue. I do not say a debate of the full house for the simple reason that we have so many morons as the last few days have shown that no debate would have been possible with over 500 members. I do realize that there would have been some security concerns which may not have been possibly disclosed publicly, but than those aspects could have been handled better than what was done. Also, the UPA made the stupid mistake of trying to sell the deal as the kill all of India’s energy security concerns. The deal would help the energy problems and at a time when we would need all the help we can get, 6% nuclear power would definitely help. This was what the Government should have stressed upon instead of saying that the deal would solve all our problems.
  2. The communists showed their ideological obsession at the expense of rational decisions in the interest of the country. Thus their biggest problem was that the deal was with the US. As a result they failed to focus on the issues of importance and kept harping on their anti US rhetoric. Plus the ego issues of Mr. Karat. A person with such ego issues should never be given so much power. Maybe the communists would learn something from this. At a time when both the UPA and NDA are pro business and as so often happens in such cases, the poor get sidelined, the communists can play a good role of watching out for the poor and making sure bad slips do not happen. Unfortunately, they are too busy talking playing ideology while doing Nandigram.
  3. The BJP is supposedly a right wing party. They are supposed to be more attuned to national security reasons. Thus in a deal such as this, they should have been the first to appreciate the unspoken foreign policy and security aspects and should have shown a pro deal attitude. If something was bothering them, they should have been interested in a vibrant debate and a proclivity in favor of completion of the deal as opposed to scuttling the deal. Instead what we saw was them wanting to not let the Congress get any recognition for the deal and for this they have been more than ready to sacrifice the interest of the country for petty political gains. This was obvious when last few days they kept saying that they would want to go back and revisit the deal themselves. Also, using the deal for petty politics was quite obvious too from the fact that Mr. Advani’s speech hardly touched upon the deal but on everything else. Disgusting behavior by a party that claims to be a security obsessed right wing party!
  4. While calling for a no confidence motion on the Government when it has only about 100 days to go anyways is bad politics, Mr. Advani did raise some pertinent points. The performance of the UPA government has been poor at best. Little has been achieved on its CMP; the Bharat Nirmaan scheme is hardly a resounding success so far. While inflation may not necessarily be all the Governments doing, the way they have handled the inflation management has hardly been of any use or rationality with the rupee still tracking the weakening dollar and not appreciating. On the reform front, little has been done to implement recommendations such as those in the Rajan report (though I wonder how much the communist parties have played a hand in this). Infrastructure development has not exactly been stellar either. And worst of all has been foreign policy and security. The danger of terrorism has increased and trifle little has been done to catch the culprits or make the country safer. Kashmir is a mess as always and little has changed barring the fact that whatever little has improved there is mostly because the Kashmiris are getting tired of the militancy. The North Eastern states continue to be neglected and treated as second class citizens. Appeasement politics still rule. Internationally, China has continued bullying us while we have continued appeasing them. Little has been done in using this juncture where Pakistan is weak to gain any benefits from them. The Africa debacle where we woke up too late to China for resources is well known. Little progress has been made with other countries both east and west of India. The concerns of importing illegal immigrants and fundamentalism from Bangaladesh continue to grown. Much as we would like to believe, India has little to show for the hyped new power status when it comes to international diplomacy.
  5. The gadha trading (horse trading of our gadha leaders) that has been going on obviously is a shame on the leaders of the country. It is also quite obvious that both sides are deep in the dirt on this. The same way SP leaders migrated to the BSP, NDA leaders abstained and came to the side of the UPA. Shits high on the ceiling and there is an absolute lack of moral high ground of either side. However, the display of cash in the Loksabha was an utterly stupid and thoughtless move on the part of the NDA. This directly hurt the prestige of the country and in the end achieved nothing. The same attention on the issue could have been brought in much more sensible and ways less detrimental to the prestige for the country. Instead what we have now is a utter mockery of democracy in the country. In their moment of desperation after realizing they were not going to win this one, they tried to pull off this stunt and get the vote delayed – an attempt that thankfully did not work. Another thing that is being said is that the gadha trading was shocking to the public. I believe there was hardly anything shocking except for the tamasha in the Loksabha. The people of India are quite well aware of this kind of nonsense and the last few days had made it even more obvious to everyone that shady crap was happening.
  6. The media in India is quite superficial and hardly fulfills the function that its supposed to. This is quite obvious from the fact that not one major media house – TV or print – took the efforts to analyze the finer aspects of the nuclear deal and provide an unbiased and educated analysis of the issues in the deal. All we had were partially informed opinions and columns by either of the political groups. The media thus utterly failed as a source of educated and informed content. A thorough analysis by the media would have gone a long way in clearing all the confusion and taken away the ability of the political parties to score cheap points. But then the media is market driven, we have enough idiots who prefer news in the form of a melodrama with music playing in the background a la Aaj Tak to really have a sound media. While the market is there for educated responsible journalism, the market is bigger for dumb news and the lure of money coupled with limited resources of the media houses means we get moronic news coverage.
  7. The rise and continuous rise of local parties is a big concern. Equally importantly, the importance of the cow belt in country politics and their playing a highly disproportionate role vis a vis their contribution to the country’s growth and prosperity is an even bigger concern. I think it’s high time the country started thinking of amendments to the constitution to make changes such that only parties with a nationwide presence should be able to rule from the center. This of course should have to go hand in hand with more power over their own affairs to the states – especially fiscally. Bad states can get relief from the center once in a while but definitely a progressive state should have the right to use its own fiscal resources instead of subsidizing economically backward states like the cow belt. Of course, utilization of their natural resources by say Jharkhand should help Jharkhand too. To each his own. Also, such amendments should help reduce the ability of corrupt junk politicians like Mayawati and Mulayam Singh with their uneducated cow belt concerns to not have a say in issues such as national security and national trade. Of course they do provide lighter moments like Mayawati talking about Izzat when she has scores of corruption allegations against her and then saying that the UPA and NDA conspired to not allow her to become a PM since she is a dalit.

Of course the mess in the current state of affairs is not exactly a close ended blame. Democracy always throws up leaders of the populace which the populace deserves. So long as Indians continue to sit by the sidelines and let the same people rule, so long as we continue to vote along the lines of caste, religion and language and so long as we do not bring out leaders to account; little will change and the mess will continue. The UPA will just be replaced by the NDA or vice versa.

June 28, 2008

Breaking The Shackles Of Indian Politics

Filed under: Governance,Politics — Bottom's Up @ 11:32 am
Tags: ,

Ramchandra Guha, after his delightful and hugely entertaining history of modern India, continues to display his excellent ability to describe the India around us in this wonderful and well balanced essay in Outlook. Guha is spot on with the points that he asserts are hurting India.

According to Guha, one of the biggest problems facing India today is that of extremism and in this essay, Guha shows equal contempt for that of the right and that of the left. The right wing Hindu extremist brigade continues to use the tactic of making a schism within India through its politics of them vs us. To this extreme wing of India, Muslims and Christians are despicable minorities that need to either accept Hindu superiority or else leave the country altogether. Guha does not delve much on the causes of and contradictions in this political philosophy. For one, identity and divisive politics in the most extreme are more often than not, according to this writer, products of frustration with the status quo and an inability to change one’s own condition for the better. Granted that even if everything is great and people are happy, there would still always be some amount of divisive politics, such being the nature of politics. However, the the degree of absurdity and the lack of discourse on the consequences is usually more prevalent during times of social frustration. With regards to the causes, Guha should have given more ink to the role played by the divisive and appeasement politics indulged in by members of the so called centrist secularists such as the Congress, the SP, the BSP, etc. While it is difficult to say what came first here, the chicken or the egg, it would not be too wrong to say that the Hindutavadis and the appeasement secularists drive each other to new absurdities. He does mention that the fact that extreme fringe elements represent the minorities and a moderate voice gets drowned out from their politics does not help matters either. Coming back to the contradiction of right wing politics which Guha does not touch upon is their claim to work for a stronger India. However in the following two scenarios of a Hindu rashtra, a strong India cannot occur –

  1. Hindus are the superior class of people and the minorities are second class citizens :  When a large chunk of a populace such as that in India (10-15%), albeit a minority is treated as second class, a peaceful and thus prosperous nation is unsustainable long term. A time always comes when equal rights are demanded and peace goes out of the door.
  2. The other option often presented is to no longer have these minorities as a part of the nation : Again when you are talking about close to 150 million people, unless your solution is to convert all of these to your own faith (which is impossible), the idea that such a large mass of people will leave and go somewhere just like that is absurd. The only solution is to give them land where they can migrate to, i.e. a future partition of the very India the right wing claims to care for. An unacceptable option to say the least.

Thus the final goal of the extreme right is but impractical and unachievable. Also, while these extreme elements claim to speak for the Hindus, and try to find religious justification to their political ideology, they can scarcely do so since there is nothing in the religion itself to justify oppression of others.

Guha also mentions something quite relevant and that is the lack of spine and the incompetence of the State when it comes to tackling extremism, both the causes and the effects. Thus the State has time and again been spineless to deal with elements that have tried to destroyed the fabric of Indian social life and spread disharmony. Raj Thackeray never had to worry about consequences, nor did Congress leaders in 1984 or BJP leaders in Gujarat.  Equally importantly, the causes are never tackled and fuel more anti-State sentiments. More often than not, liberation movements – be it the Naxalite movement, the movements in the Eastern States or even the much more complicated Kashmiri movement – can find either the cause or the solution if not both to their woes in greater political and economic participation. While dealing with the anti-State symptoms of these movements of the terrorism kind is important and is something which the State has done, dealing with the cause is just as important and this is where the State has failed miserably over the years.  Dealing with the communist threat – a threat which Guha talks about explicitly here – will be better done by bringing prosperity and participation to these people and not through debacles like Salva Judum and Binayak Sen.

Guha also talks at length of various other issues such as rising inequality and the non existent efficacy of the State to do much about it, failure of State schemes in primary health and education, destruction of the environment and corruption.  These are all equally important and worrisome aspects of the India of today. However, this writer believes that it all boils down to one 500lb gorilla in the room. Indian Politics. We have a politics where the choice is between bad and worse. Competence rarely matters and the idea is to maintain the status quo. Populism has replaced courageous politics. A vibrant and healthy debate on policy issues by its representatives is the hallmark of a healthy democracy. However, in India, politicians rarely know the issues well enough to debate them and bring about policies. Instead a politics that panders to the lowest common denominator at the expense of overall development and progress is the norm. Parties like the Congress are personal fiefdoms of their leaders and have little or no democratic internal institutions so to speak of.  Parties like the BJP may not be fiefdoms but lack a vision or care much about anything more than coming to power. Corruption and  a lack of political will and direction is the hallmark of all parties. The policies of an all imposing center initiated by Mrs Indira Gandhi have resulted in this era of coalition politics where little of consequence ever gets done at the center (For that matter; with her policies of destroying democracy within her party, attempting to make the center all powerful, turning from a politics of courage towards one of populism and turning away further away from free markets at a time when the basic infrastructure had been put into place by the state and India should have espoused free markets; this writer believes Mrs Gandhi has had a negative impact on Indian politics and policy more than any other leader or event).

Till this system of politics changes, India may never reach its full potential to be an influential world power. However, the problem is that the system feeds upon itself. Individuals if they oppose the system do not go very far and manage little.  However, there are a couple of forces in action which give one more reason to hope. One is the rise of media and private institutes. Thus we have seen a spurt of media and watchdog institution activities in bringing the State to task on its failures. Failures by the State in areas such as education and public health are also being made less relevant due to functioning private institutions. The second force is that of the rise of the middle class. As India’s middle class expands and the prosperity of its people increases, we see a rise in expectations from the State. We also see more and more people with not just the desire but also the time and ability to bring about  change in India. Currently this group of courageous individuals is working as a part of the growing non profit sector. From starting with non controversial social issues, more and more people are taking up issues of policy and local self governance. It is but a matter of time when individuals like these enter mainstream politics and try to change the very system itself. Thus some of the political mismanagement is already reducing due to the media and such and a lot of it will change when these neo activists enter full fledged into governance. When that happens, the potential of India will be truly unleashed.

June 15, 2008

Bharat Nirman Intiative

Filed under: Governance — Bottom's Up @ 11:36 pm

Mr Mani Shankar Aiyar and the Congress seem to have started their election campaign as the elections approach. Take for example this recent address at University of Stanford [sic]. This speech should definitely throw some light on what the Congress’ election campaign is going to look like. Yes, they will be quick to take credit for a lot of things. Of course much would be made about equitable growth (a noble idea indeed which has so far been backed by misdirected or non existent policies). Yes, the Aam Aadmi will be talked about everywhere. And a good part of this Government promotion could be the Bharat Nirman schemes (if it is not already).

So lets take a quick look at the Bharat Nirman projects based on the numbers we have so far . A quick perusal of the website(s) for the same seems to turn up some good news, some OK to bad news and some no news. In terms of road building, only about 64% of the target for new roads has been achieved and 82% of the target for road upgrades has been achieved. However, for a Government that talks a lot about the Aam Aadmi, in terms of irrigation coverage only 56% of the target has been achieved. In terms of providing water supply to the citizenry, the target has been exceeded by about 9%. For rural housing projects, the numbers provided are broken down by state and due to time constraints, I have not had a chance to collate the data and analyze the same (getting in touch with the related department for collated numbers did not result in a response). For the number of telephone lines provided and electrification of habitations, a quick perusal seems to not turn up any data at the time of writing this post. Now if we consider anything over 85% as a good performance, we have two cases of bad performance, one of satisfactory performance, one of good performance and two cases of no news. By any standards (except the benchmark of the previous 60 years), this is not a great performance. It is not terrible, but not something that they should be promoting as a great success.

Of course we are not even talking about the quality of the work that has been completed. Maybe these roads in desolate areas would survive a little longer than election time. And maybe the water being delivered to the homes would be more than a token few hours daily.

June 2, 2008

Libertarian Paternalism

Filed under: Governance — Bottom's Up @ 3:09 am

A few weeks back, the LA times carried an interesting article in what is titled ‘Libertarian Paternalism’. The article basically advocates a new form of libertarian governance where people are given choices for various aspects of their lives. However, the difference comes from the fact that the choices put forward are such that the Government can actually have some say in how things are planned and controlled through what is called ‘Choice Architecture’.

Quoting –
The libertarian aspect of the approach lies in the straightforward insistence that, in general, people should be free to do what they like. They should be permitted to opt out of arrangements they dislike, and even make a mess of their lives if they want to. The paternalistic aspect acknowledges that it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier and better.

Private and public institutions have many opportunities to provide free choice while also taking real steps to improve people’s lives.

In a nutshell, the approach is

The most important social goals are often best achieved not through mandates and bans but with gentle nudges

Now, choice architecture has indeed been a part of our everyday lives through design of various things where we make choices but this the application of the same to governance is indeed an idea I have not seen publicized much. This does raise to me two issues worth considering

1. Can such a form of governance actually work. Or would it be a form of governance where nothing ever gets done. If this can work, can it work across different types of countries – big/small, homogeneous/heterogeneous, rich/poor, etc. Also, where does benevolent advocacy through subtle means end and Big Brother jump in?

2. At a more fundamental level, is this even fair to the people where the illusion of a choice is indeed given, but the choice given is quite restricted and thus the freedoms are less and delusional?

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