A Broken Mechanism

Mechanism is a set of rules for separate entities to interact with each other. A good mechanism matters. Even the nature has designed physical rules of interaction, such as action=reaction, gravity, or various conservation laws to make sure that every physical entity is accountable to other entities. These rules bring stability in nature.

Mechanism design matters in human lives too. If we want to enjoy freedom, we need to design rules of interactions so that we are accountable to our actions. One of the domains where mechanism design matters is our governing structure. Being an Indian American, I observe two political systems and see how they function.

In the US, we had Trump. I believe he was as bad a leader as we could have chosen. Still, I think, American political systems limited the harm he could cause. A federal judge can question him or stay his order. Independently chosen state leaders do not have to act on his wishes. Independently chosen senate and house (upper and lower house) representatives do not have to approve all his orders. Nevertheless, the fact that he was the president will remain with us for decades. The judges he appointed will be judging for decades. A good thing is that the American system was able to not re-elect him.

In India, we have Modi. I believe he is also as bad a leader as we could have chosen. Unfortunate for India, its political system can’t limit the harm he caused. In almost every walk of life, India is worse than it was when he became the prime minister. Why is it so? The post is not about him, but about the underlying system.

First problem with Indian system is that if the voters need to choose their Prime Minister, they have no choice but to ignore the merit of their local representatives. So when such a prime minister is chosen, the prime minister can enjoy dictatorial power. His parliamentarians know that it is not them who earned people’s mandate. Not all leaders in his cabinet have mandate from people. So they can't provide him a fearless opinion or opposition. We saw that when he single handedly destroyed Indian economy by bringing in demonetization. That was a single act, very noticeable. His government harmed the cordial relationship among different communities. He also compromised independent working of various institutions, such as the central bank or the central investigative agencies.

In such a situation, the judicial system can try to defend people's rights. Here also Indian system failed its citizens. While a judge is considered old enough to retire at 65, the judge is not considered old enough to take other duties. Assigning them other duties after retirement lowers people's trust in judiciary. They are perceived to delay important cases, especially some of those where the judiciary will be in conflict with the government. In case of Trump, even a federal circuit court's judge can stay his order, such a thing was not done by even the supreme court in India. The supreme court in India failed to protect the rights of the citizens to pursue their happiness when the government started dictating that it is okay to spend their cash on the wedding ceremony of their children but not on the 50th anniversary of their parents. Supreme court also failed to protect the people of Kashmir when they were practically house arrested, and hundreds of people were taken as political prisoners. Supreme court had full 86 days to rule on whether it was constitutional to split a state, or make a state a union territory, or for the center appointed governor to sign on behalf of the state's people before the state was actually split, and people’s rights of self governance were taken away. 86 days is a long time for such urgent matters!

We saw that even the system behind the office of Indian president needs rethinking. I think it is a very expensive office for Indians for not as much worth. An Indian president possibly has lesser role than an election commissioner, who are simply first class officers. Why should the president office be any more expensive than an election commissioner? I am supportive of the 3 recent farm laws because they were progressive, but not the way they were passed. I think, these laws were rushed through the upper house and the votes were not counted. This is enough reason for the president to not sign these laws. He did. Why? Indian president is mostly a ceremonial post, he is supposed to sign the laws approved by the parliament. What if a law was not appropriately approved by the parliament? The president is not required to sign a law not approved in the parliament! Therefore in a good mechanism, the president has the right to demand the names of the representatives who support and who oppose a law. Why in the world of technology where actual vote can be conducted in a matter of minutes, we need to depend upon a subjective voice vote? This is clearly a bad system.

The previous president was given the Bharat Ratan (the gem of India, the highest civilian honor). It turns out that in the ceremonial ranking Bharat Ratan actually lies lower than the status of “former president.” Again this is a bad mechanism. You do not reward junior status to a senior person. It is clear to me that the former PM was better qualified to be a Bharat Ratan than the former president. The problem with bestowing the Bharat Ratan to a former president is that it lowers people trust in the office of the president. What if the current president does not question the government because that lowers the chances of his/her getting the Bharat Ratan? A good mechanism avoid such perception and incentives. An easy way is to put a required minimum gap for bestowing a honor to a former holder of a constitutional post. In the past, the government actually bestowed such an honor to a sitting prime minister.

Farming in India is a state subject, and still the central government made laws regulating it. This is problematic. India is a vast country with different kinds of farming in different parts of the country. It would have been better if the supreme court had decided on the laws. The way they are withdrawn, it now makes it harder for this or the next government to bring reforms.

How to fix this mechanism. It is very hard. Ideally, India should be a union of states just like the US is, i.e., United States of India. If this were the case, we will see a lot more experimentation in India. Higher speed of experimentation speeds up the discovery of beneficial policies. Next, if people really want to elect their prime minister, then change the system so that they do not end up ignoring the merits of the representatives. This way these representatives will be able to question the prime minister fearlessly. Further, the current system of discretization lowers the voice of minority in the parliament. A voter of a losing party in the parliament has 1/8th the voice of a voter of the winning party. I think this may be one of the most unequal representations among the largest democracies. This should be corrected. Unlike the American system, a member of Indian parliament represents the party and not the constituency, unless the member is an independent. In case the party’s interest and the constituency interest are at odds with each other, the representative is required by law to vote in the party’s interest.

I think mechanism design of our governance is as important as the laws of physics for the existence of this universe. Conceptually we should strive to make better mechanisms, though getting agreement on any change is almost impossible.