#349 Slowly; then Suddenly

Aaya Ram Aaya Ram and India-US Dynamics

India Policy Watch: Bharatiya Jackpot Party

Insights on current policy issues in India

—RSJ

After the instant implosion of TMC following their defeat in the state elections, last week was the turn of six MPs of Shiv Sena (UBT) to discover their love for the BJP. A month back, it was the Rajya Sabha members of AAP. Prior to that, a few BJD members found their moment of truth. And perhaps it has been only a few months since it was the YSR Congress facing the spectre of defection to the BJP.

This has been the story for the past 5 years or so. A faction in a regional party decides that it, rather than the original leadership, represents the “real” party. A government survives because enough elected representatives abandon the party on whose ticket they sought votes only months earlier. Opposition leaders join the BJP and discover in a happy coincidence that the corruption allegations, investigations and raids that had surrounded them for years suddenly cease.

These instances are so familiar now that they no longer raise eyebrows. All that’s left is for Uddhav Thackeray or Mamata Banerjee to join the BJP and blame aliens (or Steven Spielberg) for everything they did in the past. That might make defections newsworthy again.

Taken individually, we have seen this movie before. Indian politics has lived with defections since the early decades of the republic. The phrase “Aaya Ram, Gaya Ram” entered the political vocabulary more than half a century ago. One of the great socio-cultural contributions of Haryana, apart from khap panchayat. Congress governments routinely engineered splits in rival parties in the 70s and 80s. State governments were dismissed under Article 356 so frequently that the Supreme Court eventually intervened to impose limits. The acquisition of rivals is not a BJP invention. Nor is political opportunism a twenty-first-century innovation.

Yet it will be naive to dismiss this mass exodus into the BJP fold as the usual dance of democracy in India. There is a reason why the current trend feels different from the familiar churn of Indian politics.

A useful way of looking at this phenomenon is not to begin with ideology, morality or loyalty. It is to begin with incentives.

Political systems, like economic systems, reward some forms of behaviour and punish others. Politicians respond accordingly. They tend to be highly rational actors with their antenna finely tuned to their incentives, current and future. They understand power, having built their careers in preserving it and then advancing it. Their success depends on this self-preservation instinct. Networks of supporters, local leaders, contractors, donors and workers depend on access to power through it. Any political system eventually produces exactly the behaviour that its incentives encourage.

For most of independent India’s history, the incentives facing a defeated politician were relatively straightforward. Losing power was unpleasant, but it was temporary. The expectation that governments would eventually change remained intact.

Congress looked invincible until it wasn’t. The Janata experiment soared and then collapsed. Congress returned and then lost again. Regional parties broke away from it and fought against it often in collaboration with the BJP. Coalitions became normal because of this splintering. BJP itself spent decades as a marginal force. In the sixty-seven years between Independence and Narendra Modi’s victory in 2014, no serious politician could be confident about who would dominate Indian politics ten years later. That uncertainty acted as a restraint on political behaviour. It acted as a moral thermostat.

A legislator contemplating defection had to weigh immediate rewards against future risks. Joining a rival party could bring a ministerial position or proximity to power. It could also produce electoral punishment if voters viewed the move as a betrayal. Remaining loyal to a weakened party could be painful in the short term but rewarding if the political cycle turned. The future was uncertain enough that both choices carried risks.

What has changed is not merely the balance of power overwhelmingly in favour of the BJP. It is the perception of permanence. A large number of opposition politicians now appear to believe that once their party loses power, especially against the BJP, the path back has become extraordinarily difficult. The BJP enters every election with advantages that no rival currently possesses. Its financial resources dwarf those of competitors. Its organisational machinery reaches deeper into society than any other national party. It benefits from a communications ecosystem that works throughout the year rather than only during election campaigns. It has become exceptionally skilled at converting elections into presidential-style contests centred on Narendra Modi. Even where state leaders matter, the campaign eventually gravitates towards the prime minister.

Alongside these advantages sits a second set of perceptions that are harder to quantify but impossible to ignore. Opposition parties can see that institutions expected to function as neutral referees no longer inspire confidence. The Election Commission has eroded its credibility over the last few years. Investigative agencies led by the ED and CBI are seen as extensions of political strategy. The judiciary has a record of going along with the arguments of the party in power more often than not. State machinery is more responsive to the needs of incumbency than a democracy should permit.

This belief of BJP invincibility is no longer based on ordinary field work of karyakrtas or the policies of the government. It now rests on the BJP’s will to power and the drive it has to subvert any existing norms to achieve it. This may not be proven. But politics runs as much on perceptions as realities, and this perception itself is changing behaviour. Politicians do not make decisions based on constitutional theory. They weigh their options based on what they believe is likely to happen next.

And what many of them believe is that losing power now carries costs far beyond losing office. The ordinary voter sees a politician losing a ministerial bungalow or a government vehicle. Politicians contend with the real consequences. They see investigative agencies examining decisions taken years ago, their associates receiving summons, and their businesses facing scrutiny. They see financial supporters becoming nervous as they come under the scanner. Local administrators and police immediately become unavailable or hostile. In India, governance is so opaque and discretionary that very few people who have exercised power for long periods emerge entirely untouched. Some may be guilty of serious corruption. Others may have merely signed files that can later become the subject of inquiry. Many inhabit the grey zone that has always existed between political patronage and outright criminality. The mere prospect of a prolonged investigation for the past is often punishment enough.

Back in time, there was a kind of honour system among the thieves. Since political power was seen to be transient, those who came into power would only go after other politicians who had committed egregious crimes. The run-of-the-mill political graft was ignored as a quid pro quo for the future when you might lose power, and the shoe would be on the other foot. This meant most politicians could breathe easy while sitting in opposition ranks. This honour system is gone now because the BJP today doesn’t fear the prospect of being out of power. There is no fear that those it is persecuting now might in turn become persecutors themselves. This is a double whammy for democracy. Those out of power know they can’t rest easy and soon decide to crossover to the BJP and get a respite. And those in the BJP have the incentive to wield power and its spoils arbitrarily.

Public choice economists have spent decades studying how institutions shape behaviour. Their central insight is that individuals generally adapt to incentives rather than abstract ideals. Democratic systems work because the incentives of politicians and the interests of voters are aligned often enough to produce accountability. A donor deciding where to place political contributions notices which party is rigging the system to be permanently ascendant. A bureaucrat deciding on challenging a controversial order notices where power is concentrated and turns compliant. Capital deciding which relationships matter and how to invest for the next decade notices the same thing. Journalists, regulators, police officers, judges and local administrators are all influenced, consciously or otherwise, by expectations about where authority will reside in the future. None of this requires conspiracy. It emerges naturally from incentives.

The cumulative effect is the gradual formation of a single-party system.

Such systems do not resemble the third-world dictatorships of the twentieth century. Opposition parties continue to exist, and elections take place periodically. The media remains free optically, and critics continue to speak. The institutions of democracy remain standing on paper. What changes is the expectation from these. Opposition parties cease to be viewed as governments-in-waiting and increasingly come to be viewed as temporary holding areas for politicians who have not yet made their peace with the ruling establishment.

Winning elections is what political parties are supposed to do. That is not a cause for concern. The concern lies in the possibility that repeated electoral victories, combined with financial dominance, institutional influence, control over narrative formation and aggressive use of state power against rivals, are creating conditions in which political actors increasingly doubt that power can change hands in any meaningful sense. As I have written before on these pages, democracy rests on a simple proposition. Those who lose today must believe they have a fair chance of winning tomorrow. The health of the system depends less on the confidence of the winners than on the confidence of the losers.

The stream of defections flowing through Indian politics is therefore worth examining. Most are ordinary politicians responding to the incentives before them. The larger question is why those incentives now point so consistently in one direction. The route to a one-party state need not pass through the suspension of democracy. It can happen like it is now in India. A slow buildup of incentives that make participation outside the dominant party less attractive, dangerous and, eventually, less rational.

That journey is well underway in India, as seen in the choices the opposition politicians are making when nobody is voting.

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Matsyanyaaya: India-US Dynamics

Big fish eating small fish = Foreign Policy in action

—Pranay Kotasthane

Earlier this week, I attended the ninth edition of the excellent India-US Forum, which is convened by the Ananta Centre in partnership with India’s external affairs ministry. It brings together government and non-government folks from both sides to discuss ideas for developing the partnership. A brainchild of the current external affairs minister, it was launched when he was India’s foreign secretary to foster linkages between the two countries.

Given the recent potholes in this relationship, I was interested to find out what Delhi thinks about the US partnership. The discussions are held under the Chatham House Rule, which means attendees are free to share the information received without attributing it to any person. What follows are some impressions that I collected from the discussions.

The word “trust” was mentioned a lot. Most of us suffer from a recency bias, so it wasn’t surprising that many speakers used the recent Fable5 denial and the US attack leading to the death of the Indian seafarers as the backdrop to their remarks. A few years ago, the Biden Administration’s AI Diffusion Rules chip rationing rules had similarly set the tone for many conversations that followed.

While recognising the complications introduced by these actions, the Indian side appeared to view them as symptoms of a changing US, rather than as actions specifically aimed at India. The one red flag clearly raised was American actions during and after Operation Sindoor vis-à-vis Pakistan.

As for the American side, the officials continued to reassure that India was a crucial partner for American interests. A $20.5 billion investment commitment by Indian firms into the US as part of the SelectUSA initiative seems to have created “good vibes” about India. It was said that a Quad Leaders Summit might happen in India soon.

It was suggested that the recent name change of the Indo-Pacific Command to the older Pacific Command was largely due to domestic politics in the US, and that PACOM was a callback to far happier times for the US defence establishment (read Cold War). The message was that a partnership with India would become even more important to an American stance focused on the Pacific. There was hope that the US Trade Representative, Jamieson Greer’s visit to Delhi next week would help resolve the last few troublesome aspects of the trade deal between the two countries.

The American non-governmental participants, like the rest of us, seemed perplexed at times by the shifting positions of the US government. While there was the usual cordiality and mutual connections on both sides, I personally felt that the tensions over the last two years had sucked out some of the warmth and comfort of the relationship. The conversations were more transactional and frequently drifted towards India’s strengths and weaknesses rather than focusing on the far tougher questions about ideas for advancing the India-US relationship.

Those in the Indian technology ecosystem insisted that, despite the tensions at the political level, existing projects and agreements haven’t been adversely affected. The concerns over GE404 delays or Fable5 and Mythos model denials didn’t seem to be top of mind for most technology and defence tech players from India. On defence cooperation, persistent surveillance, data sharing, special forces training, electromagnetic spectrum dominance, and logistical dominance were listed as the five areas of possible cooperation.

Overall, the sense I got was that India is not currently looking at coercive options of the kind I mentioned in the previous edition. The mood rather seems to be to continue engaging a transactional US in a business-like manner, to prevent it from erecting new barriers going forward.

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HomeWork

Reading and listening recommendations on public policy matters

1. [Dashboard] Critical Minerals Lists are in fashion. But most of them are so long that they make little sense from a policy lens. So, Tannmay Kumarr Baid and Shobhankita Reddy have put together a dashboard that classifies critical elements into six groups based on supply, demand, and technological parameters. Each of these groups requires a different policy approach, which they also outline. Check it out.

2. [Paper] There is an important debate in the pages of the Indian Express on Indian Inc.’s lacklustre R&D credentials. The Chief Economic Advisor, Anantha Nageswaran, and Naushad Forbes both make compelling arguments. This is precisely the question that Sarthak and Pranay tackled in this August 2024 paper, India’s Climb up the Innovation Ladder: Policy Enablers and Impediments.

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