Tuesday, June 16, 2009

The "Game theory" of entitlements

India is much advanced in its innovation of entitlements compared to the other democracies in the world.Our politicians, mostly illiterate or semi illiterate, are masters of this entitlements game and irrespective of the party or ideology all of them agree unanimously in this regard or at least no one would dare oppose any entitlement policy.They know where they are putting their monies.

The Karnataka state govt has apparently come up with one such entitlement plan that you can read about here[ Link ], though this time they are addressing their core voters. Some argue that there is nothing wrong in this as the money is going back to those who are contributing to the temples, all these days this money is spent only on the foreign pilgrimages of so called religious minorities in India.
The YSR govt of Andhra had already come up with one such plan for a trip to Jerusalem and the CM himself has utilized the plan after his emphatic win.
The new corporate affairs minister of the central govt is also batting for one such entitlement plan, this time he is asking the corporates to oblige[ Link ]again, no corporate would dare say NO to it, they might say it should be volunatary blah blha blah.

In any of the above three cases, you don't see opposition parties raising their voice against such policies.Simple game theoretic equilibrium, you satisfy your core voters and your oppostion can't oppose it. It's such an effective weapon.

But, we have witnessed our "caste leaders" ( Lalu Yadav, Mulayam Singh Yadav, Sharad Yadav etc) vociferously opposing women reservations bill in the parliament. I sometimes wonder, why are these affirmative action champions are so dead against women reservation bill.

The logic is simple here, if the women reservations bill is implemented, the sitting MPs have to vacate their seats.Each of them has to vote for vacating his seat, as the seat allocation is not decided yet. If we change the game a bit, that all the MPs know which all seats are becoming women seats then we can see those losing their seats voting against it and those not losing seats being indifferent to or for the bill.

If we forget for a moment whether the women reservations bill is good for the country as such, we can see that our politicans clearly support anything that gurantees them votes, irrespective of whether that has to do anything with the country's benefit. It's not only true for out politicians but it's true for most of the Indians. We play our own little games in our lives and do things which benefit us, it could be while voting for a party or voting against a party.
May be it's true that Indians are individually smart but collectively dumb as the ex-IIMA prof put it here
"In the first chapter of my book, I describe what I believe Indians are like by offering 12 canons of "Indian-ness." For example, one of our traits is "low trustworthiness." By that I mean we are most likely not to cooperate in a prisoner's dilemma kind of situation. Privately, Indians are reasonably smart - in fact, we are as smart as anybody else - but publicly we are dumb. Our ability to understand the need for cooperation is very low. We believe that cooperation and selfishness
cannot go together- which is not true. We also tend to be very fatalistic in our outlook. We give excuses such as, "What can I do alone? Everybody else is looking out for himself, so why shouldn't I?
The problem with these entitlements is that , similar to time, they are irreversible. Whoever may come to power in the future, will not have the gall to reverse these socially inefficient policies.

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