Connect with us

DIALOGUE FOR CHANGE

The Good Vote Banks

By Atanu Dey

Markets and democracy are arguably two of the most elegant and useful creations of humankind. Like twins, they are often found together, and naturally share some features. They are alike since both involve collectives of humans behaving strategically. A study of markets and how they succeed or fail to deliver the socially optimal outcome can illuminate how the workings of a real democracy with its real failures can be improved.

Published

on

By Atanu Dey

Markets and democracy are arguably two of the most elegant and useful creations of humankind. Like twins, they are often found together, and naturally share some features. They are alike since both involve collectives of humans behaving strategically. A study of markets and how they succeed or fail to deliver the socially optimal outcome can illuminate how the workings of a real democracy with its real failures can be improved.

Economists do it with models, often very elegant ones. Beginning with models of ideal markets, they have identified what are called market failures that plague markets in the real world. They have discovered ways to address those failures so that real markets can be nudged to grind out results closer to that of ideal markets. Consider the work of Peter Diamond, one of the three winners of this year’s Nobel prize in economics, which includes the study of labour market imperfections and their consequences.

Mr Diamond’s insight, called the Diamond Paradox, involves the friction introduced by search costs in the functioning of labour markets. Workers incur the cost of searching for jobs, and firms incur the cost of recruiting workers. Add to that the matter of expectations, and the outcome can deviate from that of an ideal labour market. If the workers’ expectations are that firms will strenuously seek recruits, workers will expend effort in job seeking; and if firms anticipate workers will carefully examine job opportunities, firms will put effort into differentiating themselves to attract the most suitable workers. The outcome, or equilibrium, will be good for all.

Instead, if both parties’ expectations are that the other party will not bother much, then the outcome will be disheartened workers and uninterested firms leading to unemployment, or a bad equilibrium. The paradox is the existence of unemployed workers simultaneous with job vacancies.

Outcomes depend on the aggregation of individual expectations. If a sufficiently large number of individuals expect a certain outcome, then the outcome expected could indeed influence what actually happens. This can be understood through Mr Diamond’s fun little “coconut economy” model. It is set on an island far away where people consume only coconuts which they harvest from palm trees. However, due to a peculiar taboo, islanders are forbidden from eating the coconuts that they pluck themselves. Since they can only eat coconuts plucked by others, they must find another person with coconuts and trade.

It is costly to pick coconuts since it means climbing a palm tree. If an islander expects no one else to gather coconuts, then it will be pointless for her to incur the cost of picking coconuts since she will have no one to exchange them with. This will be a rational expectation if all others also have the same expectation, and the predictable outcome will be starvation all around. Contrariwise, if everyone believes that a sufficient number of others will also pick coconuts, then a vigorous coconut market will evolve with full tummies all around.

Moving from markets to democracy, substituting voters for workers, and political parties for firms, we can see an analogous mode of failure for a democracy. Like for workers in a labour market, the voters’ rational expectations about the usefulness of their vote on the aggregate can lead to either a good or a bad outcome.

Democracy is not just about voting but rather about informed choice. It is costly for voters to inform themselves about political parties. Besides there’s time and effort required to vote. If the expectation is that others will not be making the personally costly effort of making informed choices, then the individual voter will rationally conclude that it is not worth the cost of informing himself about which party best deserves his vote and then voting—because his vote would not count in the outcome he desires.

Political parties, in their turn, noting that voters are not bothering to inform themselves, or are disinclined to vote, will rationally not put in any effort in the costly endeavour of differentiating themselves to appeal to voters. The outcome will be disastrous: first, no political party puts in any effort in attracting informed voters; and second, a set of political parties that are hard to differentiate. The parties then don’t bother to address the concerns of voters and thus misgovern without fear of consequences. The desirable outcome would occur only if voters expended effort required for informed voting, and political parties responded appropriately to the voters’ efforts.

One mechanism to nudge democracy from the bad equilibrium to the good equilibrium readily comes to mind. That is, somehow change the expectation of the voter from one that says that his vote does not matter (which would be rational if he believes that others will not be voting) to one that says his vote matters (because others will also be voting.)

Our voter will vote if he is assured that sufficient numbers of like-minded voters will also vote. This can be achieved by creating a coalition of voters who ex ante commit to voting, and this coalition choosing the party or the candidate to vote for based on a set of values shared by the members of the coalition.

Let’s consider this in the context of urban Indian voters. It is generally known that they largely choose to not vote, believing that their votes don’t count. With sufficient numbers of them holding this view, the expectation is rational since it amounts to a self-fulfilling prophecy. Political parties, in turn, also rationally respond to this by not even bothering to seek the votes of this segment of voters, and after elections, ignoring their concerns. This further alienates the urban voters. In essence this is voluntary disenfranchisement of the urban middle-class voter which partially accounts for the election of undesirable people to political office.

The remedy for this could be the formation of an association of voters whose members will internally decide on specific candidates (“primaries” so to speak) based on how closely candidates match the principles of the association, following which all members will vote, and equally importantly, vote only for those chosen candidates. This allows the association to make a credible claim that its members’ votes matter on the aggregate—both to every individual member of the association and to political parties.

In other words, this association of urban educated voters is an artificial “vote bank,” much like the existing vote banks that are based on other demographic characteristics such as caste and religion, and which currently have a baleful influence on the political outcome. Based on the idea that “if you can’t beat them, join them,” it recognises that in the real world, the introduction of another vote bank (which would be unthinkable in an ideal world) may lead to improvements.

Democracy as an ideal works flawlessly in an ideal world. But like markets and their failures, in the real world democracy failures lead to seriously flawed results that have terrible consequences for hundreds of millions in a country like India.If we honestly confront the reality of democracy failures, we can figure out a way to address them urgently and seriously. The time for vote banks for good governance.

Atanu Dey is a fellow at the Takshashila Institution and blogs at deeshaa.org

Courtesy: PRAGATI – The Indian National Interest Review
The Article was first published on Nov 1, 2010 here


Pragati (ISSN 0973-8460), a monthly publication, is a reflection of some of the key issues discussed at The Indian National Interest blogs—both by the bloggers themselves and by outside scholars and contributors. It is the product of independent minds, who—­transcending ideological pigeonholes—are ­united in their determination to see a better future for our nation, India.


Continue Reading
Comments

DIALOGUE FOR CHANGE

Consultations Begin on the New Industrial Policy

Published

on

Commerce and Industries Minister Suresh Prabhu set off a series of nation-wide consultations with the industry on the proposed new Industrial Policy. The first consultation was held at Guwahati on February 02. The event, organized by Department of Industrial Policy and Promotion (DIPP) in partnership with Federation of Chamber of Commerce and Industry (FICCI), was attended by more than 120 industrialists from the North East in addition to government officials from the North Eastern States.

In his speech, the Minister emphasised that this exercise is done after 25 years truly listens to and objectively equips Indian industry for the future. The prior attempts in 1956 and 1991 were formulated at a time of financial crisis.

The minister underscored how the government was coming to the industry to understand their concerns rather than the other way around. The Minister stressed the focus of the government to make business easier for the industry.

Mr Prabhu highlighted multiple initiatives of the government to reduce the burden of regulations for the industry. He also talked about the importance of centre-state cooperation and the need for change even at the district-level.

The event was also attended by Mr Chandra Mohan Patowary, Minister of Industries & Commerce, Government of Assam. In his remarks, Mr Patowary emphasized the North East region’s potential as a gateway to South East Asia.  He  highlighted the need for an  Industrial Policy for the North East

Ms Vandana Kumar, Joint Secretary DIPP, made a detailed presentation on the key highlights of the future policy. She mentioned the dual challenge of dealing with existing issues and in preparing the industry in the wake of global mega-trends such as servification, industry 4.0, responsible industrialization and rising protectionism.

The New industrial policy envisions to create a competitive Indian industry that is equipped with skill scale and technology.

Ms Kumar also highlighted some of the key ideas such as a single ID and digital platform for all G2B services across the business lifecycle, paradigm shift toward self-certification and third-party certification, plug and play infrastructure for SMEs, privatizing maintenance of industrial estates and creating a national R&D vision.

Puneet Dalmia, Chairman FICCI Manufacturing Committee stressed the need to bridge the trust deficit and further the ease of doing business. Mr Atul Chaturvedi, Additional Secretary DIPP, Dr Sanjay Baru Secretary General FICCI, Dilip Chenoy Director General of FICCI were also present.

The session concluded with a vibrant Q&A session moderated by Dr Sanjay Baru SG FICCI with the industries, who highlighted their wishes and concerns.

Continue Reading

DIALOGUE FOR CHANGE

NCERT Proposes Uniform Syllabi for Sr Secondary Maths, Science

The National Council of Education Research and Training (NCERT) has developed core syllabi in Science and Mathematics at the higher secondary level and a core syllabus in Commerce would be completed by next month.

The idea is to provide a level-playing field to all students to join professional courses, HRD Minister Kapil Sibal said in Rajya Sabha today. 

Published

on

The National Council of Education Research and Training (NCERT) has developed core syllabi in Science and Mathematics at the higher secondary level and a core syllabus in Commerce would be completed by next month.

The idea is to provide a level-playing field to all students to join professional courses, HRD Minister Kapil Sibal said in Rajya Sabha today. 

He said 21 educational boards had earlier agreed to adopt a core curriculum in science and mathematics at secondary level following a consensus arrived on this issue at the Central Advisory Board of Education (CABE) meet in August 2009 to bring uniformity in these streams.

"Accordingly, NCERT has developed core syllabi in Biology, Physics, Chemistry and Mathematics at higher secondary stage in collaboration with Council of Boards of Secondary Education and CBSE," he said.

Sibal said the core syllabus for Commerce stream is likely to be completed by next month. 

In August 2009, CABE had emphasised the need for all states to modify their curriculum, syllabi and textbooks on the basis of NCF-2005. 

"It also endorsed the need for a core curriculum in science and mathematics at secondary and higher secondary levels across all Education Boards in the country, so as to provide a level playing field to all students to join professional courses," Sibal said during the Question Hour. 

However, he once again made it clear the government has no proposal to enforce a uniform school curriculum. 

Sibal had earlier said all the 30 boards in the country have their own points of view and in such circumstances it was difficult to implement a uniform school curriculum at secondary and higher secondary level.

Continue Reading

DIALOGUE FOR CHANGE

Renowned Sportspersons to Suggest Ideas On Sporting Infrastructure

Published

on

The Sports Ministry has constituted a committee of renowned Indian sportspersons to suggest the ways for best utilization of sporting infrastructure created by the Sports Authority of India( SAI) for the Commonwealth Games. This was disclosed by Shri Ajay Maken , Sports Minister , while briefing the media persons after taking round of five Stadia of SAI , here today morning.

Disclosing the composition of the Committee, Shri Maken said “ the Committee consisting of renowned sports persons and veteran sports journalist has been asked to suggest , how best we can utilize the existing sporting infrastructure .” He further informed that the Committee will be chaired by Sports Secretary and comprise of Ms P.T.Usha , Mr Bhaichung Bhutia, Ms. MC Marykom, Mr Dilip Tirkey and veteran Sports Journalist Mr K. Dutta. It has been asked to give its recommendations within four weeks. The Committee would be holding its first meeting on Monday, Shri Maken added.

Today morning , Shri Maken accompanied with Sports Secretary, DG ,CPWD and senior officers of SAI & CPWD has visited Dr SPM Swimming Complex , National Stadium, IGI Complex, JNL Stadium and Dr Karni Singh Shooting range to see himself the status of maintenance of above sporting infrastructure .

Responding the question of media persons about the utilization of Sports infrastructure , Shri Maken categorically stated that SAI stadiums would used for following three purpose only,

          (a) For running Sports Academies for imparting training to children.

          (b) hosting National & International competitions , for which annual calendar will be prepared .

          (c) National teams training for London Olympics.

Commenting on the state of maintenance level in the Stadiums, Shri Maken said the Sports Ministry has decided to hand over three stadiums to NDMC for cleaning and scavenging and other two stadiums would be maintained by the SAI. In response to a question regarding training of National Teams for London Olympics , Shri Maken said ‘ What we can’t do at the time of CWG , we should do for London Olympics and for this SAI is in active discussions with Sports Federations and with DDA also for teams stay arrangements. Very soon, we will come out with blue print.”

Continue Reading

Also In The News