India’s Institutions and Reasoning Using Principles of Economics

Shruti Rajagopalan has an excellent post out on Rahul Gandhi’s disqualification from the Lok Sabha. We live in polarized times, so it is inevitable that you will read this post (and her post) with your mind already made up on whether she is right or wrong. Thankfully, neither Shruti’s take on the issue, nor your opinion on Shruti’s take on the issue, is what I want to write about today. My post is, instead, on how a student of economics ought to think about this issue. Your conclusions from your thoughts, and whether they agree with your instincts, is a separate issue.


India’s situation is more a slow growing cancer that is infecting everything. India’s illiberal laws, a biased judicial decision and the Indian Supreme Court’s flawed guidelines on legislative disqualification, created a situation ripe for political opportunism. Consequently, Om Birla, the partisan speaker of the Lok Sabha, from the ruling BJP, has exploited his discretionary powers to disqualify the opposition leader.

https://srajagopalan.substack.com/p/did-modi-kill-indias-democracy-by

“Murder of democracy” and “The law followed its own course, so what’s the problem here?” are the two usual, and entirely predictable reactions from both sides of our shrill spectrum. I would encourage you to enlarge the frame of your analysis if you are a student of economics. You very well may (and as a citizen of this country, you should) have an opinion on what has transpired, but as a student of economics, begin where Shruti does. She begins, I’d say, by making two points. First, that institutions matter. And second, that our Indian institutions are in slow decay.

The first of these points is well understood by watching this video:

I’m not saying we live in North Korea, and I’m not saying we live in South Korea. The video tries to help you understand the point that for any country’s development, institutions matter. This point is made in this video by using the extreme example (as Tyler mentions more than once) of North and South Korea. Over time, countries with institutions that exist and function well will do better than countries without institutions, or those with institutions that do not function well.

What does “well” mean in this context? Well, that depends on what you are optimizing for. And in this case, we should be optimizing for having institutions that make India a better place. What does the word “better” mean in this case? Ah, what a can of worms that is!

But regardless of where you find yourself on The Great Polarization Spectrum, hopefully you will agree with me that India’s institutions do not run as well as they might. This is not about pre- and post- 2014. This is about viewing India’s institutions independent of which government is or has been in charge, and their (the governments’) causal impacts on the quality of India’s institutions. A simple question: do you think India’ institutions are perfect? If no, as a student of economics, you would do well to ask why, and you would do well to think of how they could be made better. Your definition of the word “better” is a function of what you think India should be optimizing for, of course.


Shruti asks more than a few questions in her posts, and answers them. You may wholeheartedly agree, or wholeheartedly disagree with her answers. The reason you will find yourself in extreme agreement (or disagreement) with her take is because of the consonance of your definition of the word “better” with her implicit definition of that word. But ignore, for the moment, her answer and yours. Let’s ask ourselves if we agree with the questions she has raised. Here they are:

  1. Does India become a better place because we have criminal defamation in India?
    Note that your answer shouldn’t be a function of this specific case. That is, you might be tempted to say “No!”, if you are a Rahul Gandhi acolyte. Or you might be tempted to say “Yes!” because you are a Narendra Modi acolyte. Both approaches are wrong. Regardless of the specifics of the current issue, and as a matter of principle, does the existence of criminal defamation make India better or worse? Whatever your answer, why? I’m not going to answer this question for you, nor should you ask anybody else to answer it for you. Read the relevant section from Shruti’s post, and try and figure out the answer for yourself.
  2. Does the disqualification of Members of Parliament because they have been convicted of a crime make India a better place?
    I’m going to sound like a broken record, but note that your answer shouldn’t be a function of this specific case. That is, you might be tempted to say “No!”, if you are a Rahul Gandhi acolyte. Or you might be tempted to say “Yes!” because you are a Narendra Modi acolyte. Both approaches are wrong. Regardless of the specifics of the current issue, and as a matter of principle, does the 2013 judgment by the Supreme Court make India better or worse? Whatever your answer, why? I’m not going to answer this question for you, nor should you ask anybody else to answer it for you. Read the relevant section from Shruti’s post, and try and figure out the answer for yourself.
    As a student of economics, note her use of economic reasoning in two different places in this section too. Here’s the first, and here’s the second.
    Are you confused about how the second is economic reasoning? She’s saying that incentives matter, and that this rule can be misused by a trigger happy Indian executive. Again, note that this is not about the specifics of the issue at hand. Regardless of who is in charge and who is in the opposition, how should we think about this issue in principle? Whatever your answer, why?
  3. How much power should the speaker of the union and state legislatures have?
    I’m once again going to sound like a broken record, and you know the drill by now. Here’s the relevant link.


My point in this post is to encourage you to do more of long term, principles based thinking.

  1. Get better at separating out the specifics of the issue, and learn how to uncover the underlying principle.
  2. Learn how to think about these principles in the abstract, and when doing so, learn to think about the long term consequences.
    • If you are confused about how “long term” you should be thinking, my suggestion would be to use the thumb rule that a little more long term than your current line of thinking is always a good idea.
  3. Learn to think about what the word “better” means to you, when you try and think about the answer to the question “How should we go about making India a better place?”
    • Always remind yourself of pt. 2 above while thinking through this question. Guard against the temptation to not do so.
  4. Learn to ask more often why other people have different definitions of the word “better”, and learn how to not be dismissive of their definitions. Always ask what might be the strongest arguments for their definition, and learn how to argue against those strongest definitions. This necessitates being a very good student of history, of culture and of philosophy. That’s a lot of hard work, and you’ll never be perfect at it.

But as a citizen of a country, any country, what else is there to do.

No?

Author: Ashish

Hi there! Thanks for choosing to visit this page, and my blog. My name is Ashish, and I'm a bit of a wanderer when it comes to vocations. I'm not quite sure what I want to do with my life, and I'm not even sure that it is any one single thing. But I know I like knowing about a lot of things, as many as possible. I know I like bike rides, I know I like the city I was born (Pune) and I know I like reading and writing. Feel free to drop me a line if you feel like a chat - I'll look forward to it. Cheers!

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