The Indian Economy Blog

December 8, 2007

Why Does India Have Such Terrible Politicians — 3

Russell Roberts says

We should be realistic about politicians. George Stigler used to contrast his theory of politics with Ralph Nader’s. In Nader’s view, all of the ugly aspects of government were caused by the wrong people getting elected. If we could just elect better people, then we’d get better policies. Stigler argued that it didn’t matter who the people were—once they got in office, they responded to incentives. They would convince themselves that they were doing the right thing, either because they really thought so or because doing the wrong thing was necessary in order to be able to do the right thing down the line.

Being a Stiglerian in this area, I expect less of my politicians and I am rarely disappointed. Even those politicians we think of as principled, pursue the calculus of the bootleggers and Baptists. Ronald Reagan, an eloquent defender of free trade, imposed “voluntary” quotas on Japanese cars. That is the way the world works.

In the economist’s view of politics, ideology and party matter less than the incentives facing politicians. Political parties in a democracy differ more by the words they use to justify their actions rather than by the actions themselves. Republicans talk about economic freedom and the dangers of big government while making government bigger. Democrats talk about their devotion to labor unions and the dangers of free trade but they rarely push for tariffs and quotas.

[link]


Indians tend to subscribe
to the Naderian view with some exceptions.

Q) Are you a Stiglerian or a Naderian?

15 Comments »

  1. Political parties in India has very low number of membership. There is no or low annual membership fee, this means political parties don’t have any legitimate monetary income to sustain internal democracy. This is easy to fix, Rs.100 annual membership fee with 5Cr members will generate Rs.100Cr per year and Rs.500Cr in 5 years, enough to sustain political parties without accepting “donations” from large corporates.

    Electronic voting machines does not support absolutely verifiable election outcome. This can be corrected by attaching a printer to the electronic voting machine so that voter can verify the vote before casting it.

    Comment by Commonz — December 8, 2007 @ 7:40 am

  2. Stiglerian, of course. Nader’s argument is like saying “Vinod Kambli was a world-class player, on his lucky days. Unfortunately, India never happened to play on his lucky days”.

    Comment by Rahul — December 8, 2007 @ 8:54 am

  3. I am a Stiglerian. Not everyone can be a Mahatma Gandhi!

    Comment by Akhil Tandulwadikar — December 8, 2007 @ 11:16 am

  4. Can it be just one?

    Maybe we began with the right incentives but elected the wrong ppl. Over time those people inverted the system to screw up the incentives system. So now, even when good people get elected, the overwhelming (inverted) incentive system turns the government bad.

    I’ll take both lines… Stiglerian & Nadlerian :D

    Comment by raven — December 8, 2007 @ 1:13 pm

  5. i agree with ‘raven’ that the truth lies somewhere in between!

    while it is true that we deserve the leaders we end up with, it is also a fact that majority of the voters who exercise their franchise are people who are ‘incentivised’ or are swayed by ‘popular’ themes.

    the model of collecting membership fees from the party cadre is soething most parties use in the early days of their existance. they soon switch over to more remunerative model of ‘donations’ from corporates and kickbacks or ‘dividends/ profits’ from various projects that they have control over and can influence.

    Comment by guruprasad — December 8, 2007 @ 1:26 pm

  6. I am definitely a Stiglerian and I think thats how Indian politics is governed. I think it is the Stiglerian perspective that explains why Indian infrastructure is in a mess. Politicians are jumping from one reform to the next, chasing incentives and forgetting about the long game.

    Comment by India Economy — December 9, 2007 @ 8:21 pm

  7. A bit of both. We have politicians who have long criminal records and should not be contesting elections. But they get elected (somehow!). Then, the system lets them wield too much power and power corrupts even the saintly. I think the majority of the politicians at the federal level are fairly clean (thankfully) but at the local (municipality) level, a lot of them are absolutely corrupt. However, the politicians are not in office for ever. For some reason we blame them more than the beauraucrats. You look at the beauraucrats like panchayat officials, ministry clerks etc. These are the guys that run the system and keep the corruption going.

    Comment by Prakash — December 10, 2007 @ 9:09 pm

  8. I don’t believe that there can be such a simplistic explanation of corruption and how it is perpetrated. There is a compromise between these two extreme viewpoints – one which blames an external agency for the ethical premise of Indian politicians – and then there is the other extreme, which blames the very dynamics of the system of politics itself.

    We should remind ourselves that the policies which politicians have to work with have for some time now, been the result of considerable political brinksmanship, wherein, many of the changes were brought about with the elections around the corner. Many of the measures in the polity are themselves designed with aliter methods and loopholes which probably allow politicians to have a Plan B.

    It is not possible to concisely explain the problem of corruption. But there are ultimately deeper things like the set of values we inculcate in leaders and followers – these value systems being the background for what makes certain things appealing to a populace (which the politicians do) and what doesn’t).

    Comment by Rajesh — December 11, 2007 @ 3:13 am

  9. First, a typo: surely you meant *Naderian” and not *Nadlerian”?

    Second, subscribing wholly to Stigler’s viewpoint would suggest that “leaders” have no role to play; after all, everyone responds to incentives. While there is substantial truth in this – I remember Milton Friedman being asked “Professor Friedman, if you were in office would you carry out the policies you now espouse?” and him responding “No, because then I’d be a politician and not an economist.” – I also think there is a role for leadership and that leaders can make a difference. Check out the following entry on Dani Rodrik’s weblog:

    http://rodrik.typepad.com/dani_rodriks_weblog/2007/08/leadership.html

    Comment by suresh — December 11, 2007 @ 4:30 am

  10. Suresh

    Correction made. Thanks

    Comment by admin — December 11, 2007 @ 9:53 am

  11. How come the Chinese leaders are doing such a splendid job? Are they Stiglerian or Naderian?

    Comment by Akhond of Swat — December 12, 2007 @ 9:19 pm

  12. Why are ever ready to latch on to westerner proposals – whether Stigler, Nader or Friedman? Always waiting for foreigners to propose solutions.
    Have we no intellectual resources of our own that can provide solutions appropriate to India’s political & economic system? No think tanks?

    The fact that criminals are eligible for election and have been voted in speaks volumes for the pathetic state of Indian democracy.
    India is clearly not ready for a western model of democracy – it must devise a type which is authoritarian and enforces discipline.
    But then India is neither inventive nor innovative.

    Comment by Edsa — December 13, 2007 @ 12:05 am

  13. Stiglerian decay hopefully followed by a Naderian revolution and then stiglerian reformation that ratchet the administrative reforms in place.

    The decay of Indian polity was definitely stiglerian. The bureacratic system of governance with no right to information, etc. was a system that would have become very corrupt one time or another.

    However after years of decay and hopelessness, LEAD INDIA campaign, Lok Paritran and Loksatta parties are bringing in fresh hope for the public. These are going to be lead by the right people. That is a naderian revolution that i hope to see.

    The first things these people should do is to force reforms that will allow for good governance even when people wielding power are not the greatest. That is the stiglerian reformation.

    Comment by Prakash C — December 13, 2007 @ 4:18 pm

  14. [...] Previous posts in this series: 1, 2 and 3. [...]

    Pingback by The Indian Economy Blog » Why Does India Have Such Terrible Politicans - 4 — February 19, 2008 @ 9:27 am

  15. Second, subscribing wholly to Stigler’s viewpoint would suggest that “leaders” have no role to play; after all, everyone responds to incentives. While there is substantial truth in this – I remember Milton Friedman being asked “Professor Friedman, if you were in office would you carry out the policies you now espouse?” and him responding “No, because then I’d be a politician and not an economist.” – I also think there is a role for leadership and that leaders can make a difference. Check out the following entry on Dani

    Comment by kim — April 3, 2008 @ 12:58 am

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