Snakes, Sparrows, Opium and Policy Making
Our erudite readers must be only too aware of the “cobra effect”.
It occurs when a solution worsens the problem it is trying to solve. Unfortunately, the notoriety of the phrase originates from (where else?) Policymaking.
British Colonial Government designed a scheme offering a bounty to anyone who brought in a dead cobra to rid of the reptiles from the city. It worked. Fewer cobras were seen.
Yet, over a period there was a steady increase in the number of dead cobras. Bigger bounties were claimed, as entrepreneurial citizens took to breeding cobras (easier to kill in captivity). Once the government realised their mistake, it acted the only way it knows, i.e. short- termism, and ‘discontinued’ the scheme. Breeders ‘stuck’ with nests of ‘worthless’ cobras, did the logical thing. They released the cobras compounding the problem.
Policy making is complex
Most policies suffer a design problem. They naturally fail. Unfortunately, implementation is blamed.
Policymaking in India is scattershot i.e. random and indiscriminate, often makeshift, influenced by the climate of the day, driven by the political patronage or lack of it.
Research too does not always offer definitive answers. When it does, (if at all) the political milieu muddles the ‘impact’. History of medicine reveals that many theories were vague, not adequately sufficient, yet relied upon. Techniques with ‘evidence’ such as bloodletting, tobacco and opium did more harm than good.
Many ‘healers’ of those days were no different from the policymakers of today.
Meander, and eventually fail
Policymakers do not often underhand the larger issues. They are neither sufficiently rigorous in defining the problems, nor do they appreciate the complexities involved. Sometimes it is in the admission of ignorance, often the arrogance. Sometimes too much trust in the false or exaggerated ability that discourages investing in holistic thinking. Policy making also suffers because of contradictory goals.
The implementation suffers because of inordinately optimistic expectations, incompetent, disbanded governance framework, and foggy context. Will of the key players, capacity and vagaries of the political cycle only undermine the impact.
Prudence, foresight, prodigious humility
This government and other with longer vintages have announced ‘last opportunity’ and offered the ‘lazy’ (those who under - calculated or even forgot), lured those taxpayers who ‘stole’ to come clean. This ‘last’ opportunity is in its season 4, and the crooks are waiting for better deal.
The ill-prepared and badly implemented demonetisation harmed the very section it was meant to help. The poor and the smaller businesses suffered at the cost of the bigger ones. The ‘formalisation’ of the economy bankrupted several businesses.
Others worldwide too, have suffered the lack of foresight. About 60 years ago Mao Zedong launched the ‘Four Pests’ campaign to eradicate mosquitoes, rats, flies, and sparrows, responsible for the transmission of disease. He exterminated the pests and the sparrows, leading to the proliferation of the crop infecting insects. It caused the Great Chinese Famine.
The UN did no better. In 2005 it incentivised the industry with carbon credits (eventually to be monetised) proportional to the damage the pollutant was creating. The by-product of the coolant emerged as the deadliest. The industry raised the production of coolant in order to ‘destroy’ its by-product, accumulate more credits, and amass more cash. It took 8 years for redressal.
Easy solution; not necessarily ideal
Loan waivers are political and a ‘quick fix’, shifting the distress to the ‘other’ door. Banks begin to shun the small farmers, lowering credit, pushing them to the moneylenders and debt trap. For perpetuity.
However, loan waivers are a boon to the rich farmers. They corner more credit.
Similarly, the ‘minimum’ wages hurt the people it is supposed to protect, shooing new jobseekers out of the market, limiting their opportunity to ‘experience and skill’. The vicious cycle of low skills, inexperience, low productivity, ‘minimum’ wages trap them into unemployed or underemployed pit.
The industry suffers. The economy pays the price.
The government has been ‘mandating’ the builders to provide parking. Not only it encourages car ownership, it also ‘drives’ up housing cost and subsidizes ‘drivers’ at the expense of healthy, sustainable communities.
Always at odds, rarely even
Delhi faces the cobras every winter with the ‘odd-even’ schemes borrowed from several failed experiences. People end up taxiing or buying cheaper (more polluting) cars. It encourages car ownership, choking traffic, polluting and eventually does more damage.
The diesel-petrol arbitrage incentivised the rich to shift to more polluting diesel, encouraging limousines and bigger vehicles. The petrol consuming middle class paid more.
SEBI’s mandate to disclose CEO pay (a goal to inform shareholders, thereby push down obnoxious salaries) had CEOs outdoing each other to flaunt their ‘deserving’ pay.
Government’s economic response to the pandemic was inadequate, ignoring several basic economic principles. It announced and offered massive and conjoined monetary & fiscal stimuli package to augment supply.
If only the government had focused on creating productive assets and demand, we would have a more robust revival.
Power gets in the way
Too often, policymakers judge policies on their own terms, and how it makes them feel. ‘X’ number of vaccines delivered, therefore mission accomplished’. However, on sober analysis the exuberance turns to dismay because the overall impact was below par.
The distribution of power is an enabler under a nourishing environment, but in its absence, a fundamental constraint. A Crux study across different subsidy programs points to the fact that better designed schemes would not only have been implemented better and easier but would have been implemented more effectively.
The study insights that well-designed programs not only save cost, are more impactful but also offer several related and (but) intangible benefits, mainly increasing faith in the system, enhancing credibility in governance and above all, a belief that then government is indeed ‘for the people’.
Multiple & potentially conflicting goals
Indians across every Government are cursed to suffer policy failures.
Most who suffer, blame the implementations, because implementation is ‘experienced’.
The real culprit is the design. Designing policies is not exactly rocket science. It involves deep domain knowledge, appreciation of the ground realities, some degree of judgement, clarity of goals, understanding of the multi-forces that shape its implementation and above all humility.
