Public Policy – The Acorn

Three thoughts on Independence Day

On preserving liberty, preserving India

Can we keep our Republic?

All this has held for close to seven decades, so much that we take the Indian Republic’s survival for granted. Yet our confidence might be as contingent as the scepticism of many in the 1940s and ‘50s who didn’t think that the grand political project called India would last beyond a few years. The survival of the Indian Republic must not be taken for granted, and indeed, cannot be taken for granted. It is not the violence from without and within that present the greatest risks to the future of our republic. What we should be more concerned with are the side effects of the high idealism of our Constitution, for they might one day overwhelm the intended good.

The first side effect of the Constitution is a contest of values, between those enshrined in law and those hallowed by tradition.

The overriding concern of the Constitution’s makers to unify the country and its people under one state gives us the second side effect: iniquitous federalism. Demographic trends over the next few decades—with the North outstripping the fertility rates in the rest of the country—will shift more seats and power to already powerful states. At some point the relatively disempowered populations will express themselves politically.

Third, unless the Indian republic radically transforms its administrative structure—from top-down hierarchies to flat networks—it will fail in delivering even basic public services, leave alone lofty ones like social revolution.[If we can keep it]

Liberal values are at an intrinsic disadvantage because they cannot be imposed.

…while reasoning can be taught, it cannot—by definition—be imposed. You can’t force people into reason. You can’t punish them for not employing reason. On the other hand, people are forced into, and to stay in, unreason. They are punished for straying from unreason. The history of humanity is replete with the oppression and punishment of those who disbelieve, of those who challenge or repudiate faith. In the modern nation-state, one goal of politics is to capture the education system and use it to perpetrate the chosen dogma (ideology, religion, race, ethnicity and so on), that in turn perpetrates the particular narratives of power.[For reason to prevail]

Market liberals and nationalists can come together. But can they exclude chauvinists and bigots?

To be politically powerful however, an ideology needs to find lots of real people who have the courage not only to stand up for what they believe in, but also to oppose what they don’t. The happy people in the middle are happy because they don’t have to pass the Longbottom Test (“It takes a great deal of courage to stand up to your enemies; a great deal more, to stand up to your friends”). Due to political considerations, even the intellectual leaders of this “new right” will find it hard to condemn actions that clearly depart from the principles of their creed. This compromises principles and upsets the tenuously balanced ideological construction.

In other words, establishing a sophisticated ideology…requires its proponents to provide principled leadership. Remember Gandhi called off the non-cooperation movement across the country because of an incident violence in one village, Chauri Chaura. That’s how high the bar is. That’s why it’s hard to take the high road. [The right way to turn right]

Three thoughts on

On Independence Day 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004;

On Republic Day 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005

Can I have an opinion on how to annihilate caste?

Social reform is too important an issue to surrender to an ideological monopoly

It’s twitter. So it should not be surprising that it didn’t long for my tweet supporting ACLU against Donald Trump’s executive order on refugees to turn into a debate on caste. I also found out that I am not qualified to have an opinion on the latter because, well, of who I am.

Responses from thoughtful, otherwise sensible and non-partisan people prompted me to write this post. It cannot be that on an issue that is so central to Indian society, we weigh arguments not on their merits, but on the caste identity of the people who make them.

This is not to belittle the sufferings of those who are at the receiving end of discrimination. Rather, it is to reject the dangerous argument that we ought to discount opinions of people based on the community they belong to. It is also to reject the dangerous argument that only members of a community or group have the legitimate right to debate issues concerning their group. I’ve criticised Islamism without being a Muslim, supported women’s rights without being a woman, commented on Pakistani politics without being a Pakistani and recommended military strategy without being a soldier. I could go on, but nowhere have I encountered people telling me I lack the legitimacy to have an opinion on these subjects. On caste, though, terms like “savarna” and “privilege” are flung about as disqualifications by some, and epithets by others.

It may well be that privilege allows some citizens the luxury to be identity-agnostic and caste-blind. Condemning them for this makes no sense: is it wrong to be privileged, to be caste-blind or both? Votaries of an egalitarian society ought to celebrate every additional child that is raised caste-blind. Instead, political correctness requires the caste-agnostic to feel guilty, stay silent and become caste-conscious. This leaves the field only to those who will fight, violently, to protect their social power. Such rancour and strife is counterproductive to the progress towards an egalitarian society.

So here’s my argument. As I wrote, “the annihilation of caste cannot come without the annihilation of caste discourse; you can’t erase it if you keep talking about it.” Now, progressive conventional wisdom is—as one well-meaning person pointed out—“constantly acknowledging and talking about it is actually a very powerful way to erase it.”

Unfortunately, this is not borne out by empirical evidence. Caste consciousness is much stronger today than it ever was. It has become the very currency of political power. I do not see it being erased — on the contrary, it is being reinforced in every generation. The social and political empowerment of historically weaker sections of our society is a wonderful achievement, yet caste-based policies cannot remain the primary mechanism to achieve this. A couple of years ago, for the first time in independent India, the state conducted a caste census. If it were on its way of being erased, this wouldn’t have happened. People even declare their castes on their car bumper stickers now. Given this trend, the best we can hope for is not the annihilation of caste, but merely a caste-conscious society with less social discrimination. It might be a realistic assessment of where we are going, but it’s not the destination I would like for my country.

Indeed, there is evidence that reminding people of their caste adversely affects their performance. One experimental study found that “there were no caste differences in performance when caste was not publicly revealed, but making caste salient created a large and robust caste gap.” A more recent study using NSSO data found that “that caste identity in contemporary India does shape perceptions of self-worth. Among the fully self-employed, we find that controlling for other characteristics, lower-ranked groups earn lower amounts and perceive lower amounts as being remunerative.”

There is enough here to suggest that perhaps not reminding people of their caste will make them perform to their true potential. It is morally repugnant to ignore such evidence merely to conform to conventional wisdom or worse, political correctness. It would be tragedy to dismiss such insights because the researcher is born into the ‘wrong’ community.

Finally, a point about of privilege: what we should care is not whether a person enjoys privilege (or sits in an air-conditioned armchair), but what he or she chooses to do with it. Most members of the Constituent Assembly were men and women of privilege. That didn’t prevent them from producing a Constitution that was far ahead of its times. Should we summarily dismiss their arguments as being the result of privilege?

The poet and social reformer Kabir offers the necessary wisdom:

Don’t ask what his caste is, ask what he knows
Value the sword, not the scabbard it came out of.

Three thoughts for the Republic

On defending democracy from populists, reminding the Supreme Court of its duty to protect liberty and on upholding representative democracy.

For quiet contemplation on Republic Day:

Eternal nervousness might be the price of democracy

Should liberals relax when populists are democratically elected?
Supporters of liberal politicians and parties sometimes do engage in the dubious sport of blaming democracy for their electoral reverses. It would be appropriate to call out such behaviour as self-serving and hypocritical.

However, sometimes the sourness of the grapes is an early sign of bitter poisonousness. Communists, Fascists, Populists and authoritarians-sans-ideology can use democratic process to acquire power, and then systematically undermine the institutions and values that enabled them to do so. Like burning the ladder after you’ve climbed it, there are many instances in world history where this has occurred (even without invoking Godwin’s Law). The fear of “one man, one vote, one time” can be ignored at our peril. [Read the rest]

The Supreme Court must not hold in contempt what it is mandated to uphold

[In the case of the requiring cinemagoers to stand up for the national anthem] the Supreme Court dissed individual liberty.
The bench sneered at one of the pillars of the Indian Constitution. Troubling as it is, more than the ruling itself we should be concerned that India’s highest judges think this way, and think nothing of expressing it this way. The Supreme Court is, after all, the ultimate guardian of individual liberty. It gets this responsibility from no less an authority than the Constitution of India. Citizens will be justified in wondering if the Supreme Court can discharge this assigned responsibility if it harbours such cynicism or disdain for individual liberty. [Read the rest]

Why democratic governments must consult, but must neither be obliged to nor bound by the results

Ultimately, the government must have the discretion to make the decision. As Brexit has shown, doing what the majority wants does not necessarily benefit the public interest. If it comes to that, the government has the legitimate authority to decide against the most popular choice. It might have to incur political costs of doing this, but a constitutional government’s authority must be upheld. [Read the rest]

The Three Thoughts Archive:
It is a tradition on this blog to use Independence and Republic Days as opportunities for contemplation, reflection and introspection.

Three thoughts on

On Republic Day 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005

On Independence Day 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004;

Medalless army

The defence ministry must quickly resume issuing official medals.

Last week, a colleague and I were struck by what we saw at a new military supplies store that had opened in our neighbourhood. Among the usual uniforms, shoes, hats, bags and kit, we were surprised to see medals. Not just the ribbons, but the entire suites of medals ready to be stuck on to uniforms. This struck us strange and dubious.

Dinakar Peri’s report in The Hindu tells us why. It turns out that the defence ministry department in charge of issuing medals has not been doing so. Since 2008. So for eight years, the defence ministry has been awarding medals but not issuing them to officers. That’s so long that many younger officers do not even know that they ought to receive the medals from the defence ministry, and not have to buy them from military stores.

It’s not only sad, but undermines the purpose of medals by devaluing them. The economic reasoning behind issuing medals for service and gallantry is to create a “honour incentive” which can both be stronger and more effective than monetary incentives. If you undermine the honour attached to a medal, you weaken the incentive that encourages the behaviour that the medal recognises. If devalued to the point of become a routine, the incentive fails. The fact that the defence ministry hasn’t bothered to issue medals for eight years is therefore disturbing.

It should be the easiest of things for Defence Minister Manohar Parrikar to do to order the Department of Medals in his ministry to resume issuing medals prospectively, and clear the backlog over time. It’s not merely what society owes to its soldiers. It’s an important step in arresting a drift in professional standards.

Why parking needs more than proof of space

The big idea in urban transport is to get users to pay for parking and suchlike. Not another piece of paper.

The Union government is considering a proposal to make car ownership contingent on the prospective buyer producing an “adequate parking space available certificate.” M Venkaiah Naidu, Union urban development minister stated that he was keen on this and promised to persuade the Union surface transport minister and the state governments on the need to do this. A recent magazine article claims that this is an “absolutely sensible move” as it has been implemented in Sikkim and Mizoram, and has is compulsory in Japan and in one place in South Korea.

Mr Naidu means well, but by itself, the requirement of a parking space certificate will open another source of corruption without doing much to reduce traffic congestion. Anyone who’s visited a local road transport office (RTO) or obtained a pollution under control certificate will know how this works.

But let’s spell it out nevertheless: it is easy to ‘show’ you have adequate parking space because spaces do not have unique identities that are in a common database. It may be necessary to pay someone — a petty official or a person with space — to ‘show’ that you have parking space. Actually, few will take the trouble to do this. It’s more likely that the licencepreneur who owns the photocopying shop next to the RTO will arrange for the parking space available certificate for a small fee. Neither the RTO, nor the traffic police, nor the Union development ministry have the resources to check whether the certified parking space exists in reality or merely in-between folds of red tape.

Needless to say this won’t make a dent in the number of vehicles being purchased. Sikkim and Mizoram are small states with populations and geographies that might even make such a policy workable. In most other places in India, especially in places where traffic congestion is a massive problem, we will just have one more layer of regulation, one more piece of paper to be procured, some more money for petty officials an licencepreneurs.

That said, Mr Naidu is nearly on the mark. The way to reduces incentives for people to purchase and use cars is to charge for parking. Every car parked on public roads not only creates road cholesterol, but also is an implicit, undeserved subsidy to a car owner. The more cars you park on public roads, the greater the subsidy you get from the government. This creates positive incentives for vehicle ownership and use. If we stop rewarding vehicle users for parking on public roads and charge them the market price of the real estate they temporarily occupy, then we will see vehicle use coming down. That, by the way, is what they do not only in Japan, but in almost in every country and city that has sensible urban traffic. It’s not unusual for parking fees to be exhorbitant in central business districts of the world’s cities. In fact, when governments charge market prices for parking in public spaces, more parking space is created as private owners realise there’s good money to be made by creating private parking lots. [Parking availability certificates have reduced car ownership in Japan because parking spaces are available at market prices. See Paul Barter’s blog post.]

The Union and state governments must come to an arrangement on pricing vehicle parking. As Donald Shoup’s research shows, the best way to make the policy work, and get public acceptance, is to ensure that the parking fees collected go to the localities from where it is collected. People are less likely to oppose paid parking if they are convinced that the proceeds from their locality will largely be used to improve that very locality. Funds can be used to finance public transport: from bus services to bus stops, to metro and commuter rail. My colleagues at Takshashila estimate, conservatively, that implementing paid parking on fewer than 10% of Bangalore’s roads can add more than 20% additional revenue to the municipal corporation’s annual budget.

A national policy to make road users pay for parking (or dumping construction material, or hawking) would be a GST-scale reform that Mr Naidu has the opportunity to be the author of. He shouldn’t settle for that red herring called the parking space proof certificate.

Related Post: Eight ways to improve traffic flows in our cities quickly and without spending a lot of money.

Tailpiece: Donald Shoup’s insight:

Drivers want to park free, and that will never change. What can change, however, is that people can want to charge for curb parking. The simplest way to convince people to charge for curb parking in their neighborhood is to dedicate the resulting revenue to paying for added public services in the neighborhood, such as repairing sidewalks, planting street trees, and putting utility wires underground. That is, the city can offer each neighborhood a package that includes both performance-priced curb parking and the added public services financed by the meters. Performance pricing will improve the parking and the revenue will improve the neighborhood. The people who live and work and own property in the neighborhood will see the meter money at work, and the package will be much more popular than meters alone. [Cato Unbound]

A better way of selecting the top brass – 2

Politicisation will limit politicisation

Two of the more thoughtful critiques of the Modi government’s decision to jettison the principle of seniority in appointing India’s next army chief appear in the Indian Express and Business Standard today. Sushant Singh and Ajai Shukla are among the most astute commentators on the subject so it is important to read their arguments with care.*

Sushant’s main argument is that the principle of seniority in choosing the chief must be replaced by an institutionalised due process, and not arbitrary selection by the political leadership. Ajai, though primarily concerned about the politicisation of the army, also criticises the rationale provided by the Modi government in the specific case of Gen Rawat.

A reasonable person will tend to agree with Sushant and Ajai, for after all, it is a good idea to ensure that the selection process is transparently objective. However, the reasonable view in this case might be both unsatisfactory and impractical. It might be a better to allow the political executive the complete discretion to pick from among the available pool of three star officers. If the Cabinet prefers non-military criteria like partisanship, ideology or ethnicity, so be it, as the Cabinet is accountable for outcomes. The lessons of 1962 are not lost on India’s politicians. As I wrote in my first post on this topic, if we can trust the prime minister with a nuclear button, we shouldn’t worry about a much lesser risk as the selection of army chief.

Won’t this politicise the army? Well, the trajectory is unlikely to be much different from what it is now. Moreover, even as Sushant, Ajai and I are concerned about the politicisation of the armed forces at politician-general level, we are also concerned about the politicisation within the army. As Ajai brings out in his article, factional politics among the branches of the army are intense and have ended up in the Supreme Court. It is naive to believe that this intramural politics has been untouched by the country’s partisan politics. I’ve covered this objection in my earlier post.

(*As the two are both friends and sparring partners, this blog refers to them by their first names, instead of formally by their honorifics and last names.)

Time for a stiff drink

Satyagraha, Neoliberalism, CIA…we’re running out of ideas

It is perhaps a good time for newspaper editors to stop publishing any more polemical opinion pieces on the great currency transfusion (‘demonetisation’). When someone argues that people standing in lines to deposit and withdraw their own money after being compelled to do so by the government, are actually engaged in “the first economic satyagraha [using] their wisdom to articulate opposition to neoliberalism”, it is time to get off the computer and go get a really stiff drink.

It is abominable and grossly insensitive to suggest that people trying to cope with the currency shock are somehow engaged in a satyagraha. A satyagraha is above all a voluntary exercise. There is absolutely nothing voluntary about people standing outside banks and ATMs.

The subtitle of the article proclaims that “the demonetisation drive aims to cleanse the ills of neoliberalism”. That needs a sharp intake of breath and another stiff drink. Or two. The reason why there is a shadow economy is because of the absence of liberalism, neo- or paleo-. Corruption exists because of regulation, because economic freedom and liberty are stifled. If the demonetisation drive can claim to cleanse anything, it is the ills of statism, bureaucratism and the still-extant licence-permit raj. Demonetisation is a bad way to cleanse that, but that’s a different argument.

Last week The Quint had a report blaming a US aid agency and the CIA for demonetisation. Now that neoliberalism has been ritually savaged, the debate is truly over. Head to the bar, folks! They take cards.

A better way of selecting the top brass

Nothing is lost by abandoning the principle of seniority, but the armed forces need restructuring

Yesterday, the Modi government decided to supersede two general officers and appoint Lt Gen Bipin Rawat as the next chief of army staff. In a system where seniority has risen from a criterion to the criterion, and where “lines of succession” are drawn in a manner to mirror royal succession in monarchies, the move has shocked many. After all, the last time such a thing happened was in 1981 when the Indira Gandhi government appointed Gen A S Vaidya over Gen S K Sinha’s head.

Here’s the thing: the Modi government has done well to break a norm that had so become an entitlement that it had begun damaging the incentive structures of the the military leadership. The sordid saga of Gen V K Singh five years ago revealed that the army’s leadership was spending undue energy on manipulating promotions and appointments to ensure desired lines of succession. Any organisation whose leadership is engaged in such machinations is likely to suffer loss of professionalism. By elevating seniority to a sacrosanct principle, we might well have depoliticised appointments at the level of the political leaders picking the military leadership. However, it does not mean we have depoliticised appointments within the military establishment. Because of secrecy and respect that the armed forces enjoy, the ‘politics’ within the armed forces is generally invisible to the public. That doesn’t mean it doesn’t exist. Just go back and look at the reports that emerged five years ago during the Gen V K Singh’s controversy.

If the Indian armed forces had the luxury of being a showpiece, where they did more ceremonial parades than combat, it might have been acceptable to go by seniority. But India’s armed forces have been fighting wars, proxy wars and insurgencies for ever, and the future presents ever greater risks. In such a context, it is downright absurd to argue the the senior-most officer should become the commander. Furthermore, it is downright absurd to accept that the service chiefs should be both excellent commanders and excellent staff officers: a great military leader need not necessarily be the best military manager. To roll the two roles into the same office is to get a little bit of both, and the best of neither. Jettisoning the primacy of seniority is the first step: the Modi government must use the opportunity to implement structural reforms to India’s military structure. (It’s clear what such reform should entail: see this article)

There are two important objections to non-seniority based appointments. First, that it would upset the army’s internal appointments and promotions structure. Second, that it would allow the political leadership to appoint military leaders based on partisan, ideological, religious, caste or other criteria unrelated to military merit. Let’s consider each of them in turn.

Yes, superseding officers will cause genuine heartburn, embarrassment and grievances among those adversely affected by the move. The retirement or resignation of those who have been passed over for promotion count as a loss to India’s military capital. That, however, is the price we must pay for a competitive military establishment. Much of this cost is one off, representing what behavioural economists call the “endowment effect”. Because officers expect to be promoted on the basis of seniority, they feel what is rightfully theirs has been taken away. If, from now on, officers no longer expect the seniority norm to hold, they will feel less cheated. That said, it is incumbent on the Ministry of Defence and the services headquarters to ensure that the superseded officers are treated with respect and decorum; and if they have years of service left, are re-employed in government positions commensurate with their seniority.

The second objection is more serious: what is to stop the political leadership from appointing military chiefs on dubious, non-military criteria? Well, for one, it is not as if lobbying on such grounds has not been taking place. However, the argument that the prime minister cannot be trusted to properly appoint a service chief sounds pretty unserious when the office of the prime minister has everything from the nuclear button to the validity of all legal tender in his hand. If the citizens of India vote in a government in a constitutional manner, and the ruling party constitutionally appoints the prime minister, who selects his cabinet, then that is that.

Now it is not as if the Cabinet can appoint an army chief without being bound by any constraints: they will be limited to a small number of officers to choose from, and any ideological, partisan or communal preference will be constrained by the fact that the armed forces are engaged in active duty. No Cabinet would want to lose battles or wars, or found wanting in the face of external threats. Parliament must do its job and keep the government in tether: so rather than defend the principle of seniority, concerned citizens must demand the amendment of the anti-defection law that has converted MPs into robots under the control of the party leaders.

The Modi government would do well to follow up its departure from orthodoxy with a sincere commitment to restructure the armed forces. Early in his tenure, PM Modi was reluctant to risk this reform. He should not shy away from it now. The K Subrahmanyam report was almost two decades ago; there have been a few subsequent initiatives to study the matter further. It’s well past decision time.

Tailpiece: My comments on an NDTV show on this subject in February 2012.

Update: Read the second post on this topic here.

How long will the Great Currency Swap be popular?

As long as schadenfreude exceeds inconvenience

Many of us at Takshashila have been struck by the seemingly paradoxical situation of the Prime Minister enjoying popular support for the Great Currency Swap (‘demonetisation’) even when everyone has been inconvenienced to various extents. In a recent post, I argued that this confirmed my cynical hypothesis of what kind of public policies enjoy public support, because “most citizens feel the cost they are incurring is a lot less than the cost others—those with unaccounted money—will incur. For the moment at least, intangible schadenfreude is outweighing tangible personal losses.”

In a discussion today, we attempted to project the two feelings — of schadenfreude and inconvenience — to see how public support might change over time. This is described in the following chart:

Update: This is an updated version of the chart.

The excess of schadenfreude over inconvenience constitutes the level of support for the the policy. The excess of inconvenience over schadenfreude constitutes resentment against the policy. As of 15th December 2016, people still feel that the inconvenience is a price worth paying to ensure that those with unaccounted incomes suffer relatively more.

Note that this is a schematic, and the shape of the curves in this chart is not a forecast: events can move them in time or change their shapes.

For instance, if inconvenience continues to grow as people and businesses run out of adequate cash, and if they come to believe that the holders of unaccounted money are getting away relatively unscathed, then we might head towards point B, where resentment builds up. Then, as the situation eases — with adequate cash being pumped back into circulation, and with people adapting to a less-cash lifestyle — the resentment will begin to taper down towards point C.

The chart assumes that schadenfreude will diminish over time, in which case at point C, support and resentment will cancel each other out. However, if schadenfreude does not diminish, the policy will continue to enjoy popular support.

The Modi government can prevent or mitigate the rise of resentment by reducing inconvenience and by feeding schadenfreude. The former, by supplying enough currency quickly, before point A is reached. The latter way is to persuade the public that wrongdoers are getting their just deserts. However, as people hear news of seizures of hoards of new currency, or of others circumventing the moves using clever methods, the schadenfreude is likely to fall sharply.

The greatest danger to the Modi government, and to Prime Minister Modi himself, is if inconvenience does not fall, or fall quickly enough, and it continues to rise beyond point B.