Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Decoding Modi's Popularity

There is an interesting article by GZero media on the continuing high popularity ratings of Prime Minister Modi. The article can be found here. The article sought to find reasons why PM Modi continues to be popular despite the lockdown, the economic challenges and the continuing rise in cases of Wuhan flu. It discusses about a few reasons. It would be interesting to decode some reasons why PM Modi continues to command high ratings into his second term.

 

In the past, PM Indira Gandhi experienced the zenith of her popularity post Bangladesh war of 1971 but soon he regime turned into a disaster. Her comeback in 1980 did not end her troubles as Punjab exploded into cauldrons on Khalistani struggles leading to Operation Bluestar followed by her own assassination. PM Manmohan Singh was literally dysfunctional in his second term more so after the Anna Hazare fast of 2011. PM Nehru in his third term suffered setback due to the Chinese invasion of 1962 from which he never recovered. So in that context, history is not kind to Prime Ministers who have secured their second full term or made a comeback after an election defeat. One year into his second term PM Modi has faced greater challenges than what he has in the first five years.

 

Without doubt, he achieved their key goals in their manifesto including the Article 370 abolition, resolution of Ram Janmabhoomi at Ayodhya, Citizenship Amendment Act among others. He has set in the process of liberating agricultural sector from its socialist hangover through changes in the produce marketing and contract legislations. Yet, along with the same he has encountered the pandemic resulting through the Chinese virus, the lockdown imposed to contain it has resulted in economic dislocation, migrant movements have created chaos among other things. On the external front, Chinese faceoff in Ladakh has taken a violent turn disruption a near half century fragile truce. So a natural question is whether it has impacted him electorally. If not what makes him to be perceived invincible. An attempt will have to be made to find the answers.

 

A point that gets missed out in the article, but perhaps most pertinent is the perception in the common man or woman about his intentions. His intentions are perceived honest. As they would say in Hindi, it is about ‘saaf niyat’. The outcomes might not necessarily be favourable, there might be unintended consequences, but his intentions do not have traces of dishonesty or personal benefit. This was manifest through the demonetization process, GST and its teething troubles, dealings with Pakistan, economic downturn, handling of COVID-19 among other things. Furthermore, his long working hours create an aura among the people. Given he has not taken a holiday for last six years even for a single day, adds to his popularity. Furthermore, he seems to wage a lonely battle against an establishment that has long enjoyed perks and privileges make him part of the common man.

 

The trust is thus built on the intentions and the style of work without caring for personal benefits. Moreover, he is widely seen as a decisive leader. To people, it is not about good or bad that comes out but the decisiveness and boldness of action that counts. Again it was his decisive and bold steps against Pakistan that endeared him to people as much as the daring and swift step to end Article 370 in Jammu and Kashmir. For all the teething troubles, GST was seen as a necessary step to change the Indian economic landscape. His lockdown might have created economic woes or social woes through inter-state migrant movement but was seen something extremely essential to combat conceivably deadly disease. People will remember the peak and end experiences of an event and they are willing to sacrifice at the peak for a visibly happy end experience. This reinforces Modi’s hold on the Indian populace.

 

A plus point for PM Modi is his clean image. He is not corrupt and has been forthright in taking on corruption that has deeply embedded Indian life. The progress on direct benefit transfers, Aadhar based delivery, etc. are seen as necessary measures to counter corruption. Further his welfare measures like Ayushmaan Bharat, Jan Dhan, Mudra, farmer insurance, housing for all among many others have changed the lives of many at the bottom of the pyramid for the better. His welfare schemes that saw the development reaching grassroots, to the weaker sections that saw him securing a robust mandate last year. His execution and implementation are deemed impeccable and that perhaps would be his biggest political legacy. Further, the lobby based governance that characterised the previous governments has virtually disappeared. The fact, the secrecy in announcing measures has caught many off-guard and that adds to the popularity ratings.

 

PM Modi belongs to a backward group numerically small, politically insignificant and that spurs his ratings. To many, his humble origins as a ‘chai-wallah’ spurs the necessary incentives and become a role model for many. To many in the backward groups socially and economically, it is an occasion to be proud of someone who grew from the humble roots to achieve the highest position in the country. In fact, despite corruption and inefficient administration leaders like Mayawati, Laloo Yadav, Mamta Banerjee have commanded significant popularity ratings for this precise reason.

 

Modi’s personal equations with many foreign leaders also makes a difference. As the images are broadcast and circulated all over about his interactions with the top leaders across the world, it sends a message of strong and confident India. In a world where India was more of an underdog, an Indian leader talking with counterparts on equal footings gives a strong message. His invitation to President Trump to address rally in Ahmedabad while he himself receiving great reception in Dallas where it seemed Trump needed him for his re-election all add upto the aura. Not many Indian leaders  can match the reception he has received in different places.

 

In any calculus, there would be both push and pull ratings. The listless opposition led by the declining Nehru Gandhi family is perhaps the most important. Rahul Gandhi increasingly resembles a Bahadur Shah Zafar presiding over a dynasty whose clout ends at the gate of 10 Janpath. The national elections are all about stability and apart from the Congress, there is no party that has the base to even contest for half of the seats. The electoral situation more resembles something of pre-1991 wherein Congress was a dominant force while others had mere pockets of influence here and there. The only difference is BJP has replaced the Congress. Aside of this, the defection laws have made it difficult for the parties to merge together at the national level. The rounds of forming and breaking the parties is difficult at this stage in the national political scene.

 

To sum up, it is a combination of multiple factors that make Modi very strong in the Indian electoral terms. It is just not a sum of least negatives or sum of low credibility opposition but also has to do with the actions, decisiveness with which the actions were taken, the intentions with which the actions, the positives that emerged from those actions towards betterment of human lives all contribute to his ever high popular ratings.

 

 


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