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

Election Season 2021: A Note

 

The very geography of India makes it a permanent election season. There are elections round the clock in some or the other part of the country. There are elections to the Parliament, there are elections to the state assemblies. There are bye-elections to the Parliament or State Assemblies. There are elections to local bodies, autonomous councils or what not. Therefore, there is valid reason why the current government is keen on having ‘One Nation, One Election’. It is not just the costs, but the productivity lost in the election season and the perennial Model Code of Conduct in some part of the country or the other. As with any year, 2021 too has its own set of elections. Therefore, one is all set for the election season which is beginning the current week in West Bengal and Assam and will also cover the states of Kerala, Tamil Nadu and the Union Territory of Pondicherry. Besides, there are by-elections scheduled both for Lok Sabha and the Vidhan Sabha across the different states and union territories.

 

There is an interesting twist in the current elections. This election season was usually the least favorable for the ruling BJP. Given its limited base, the expected gains were minimal. The party used to have least stakes from this cycle. There used to be a hope of making some mark in Assam and perhaps to lesser extent in the others, but they remained on paper. Yet, as one goes into the election season, BJP seems to be having the maximum stake. They are out to defend their government in Assam and are making a serious challenge and by many accounts are front leaders in West Bengal. If the BJP manages to unseat Mamta, it would mark the BJP’s grand entry in the East, the home of the Jan Sangh founder Dr. Shyama Prasad Mukherjee. In Assam they have a government to defend and it might be a significant election for their strongman Himanta Biswa Sarma as he seeks to breach higher echelons in national politics.

 

Interestingly, the BJP is also making considerable inroads in Pondicherry, albeit with defections from the Congress. They are contesting in alliance with AIADMK in Tamil Nadu while they are again attempting to make a mark in the state of Kerala. While the BJP has low stakes per se, it would nevertheless be important for it to gain quite a few seats to become a serious player in the future. The BJP might be contesting just twenty seats in Tamil Nadu, yet a good strike rate would help it enhance the bargaining power in the run up to the 2024 Lok Sabha elections and the next cycle of assembly elections. In Kerala while they have hit the double digit vote share, they need to increase the same as also make gains in terms of seats. They made their debut in 2016 with a victory in Nemom, the question this time would be whether they would consolidate and make further gains. However, looking at the scenario, the state will continue to elude the party.

 

The Congress used to have some stakes in this election. Yet, in the current round, they are likely to emerge as the losers. They do not have much hope in Assam inspite of the Mahajot while the West Bengal hopes are rested on an expectation or rather a hope, albeit however faint it is, of a hung assembly with the third front key to the power. The DMK in Tamil Nadu ensured the Congress would contest only in 25 seats, perhaps the Bihar experience of Congress underperformance costing the RJD a shot at power. What is of considerable import is the party is struggling in Kerala. Kerala for the last forty years has rotated alternatively between Congress led UDF and the CPM led LDF. The current trends seem to be pointing towards a possible LDF retention of power. This, if happens, would hit the Congress severely.

 

The Congress and especially its first family have huge stakes. In case of Congress failure to win a single state, it would begin another round of dissent against the Nehru-Gandhi family. There would be voices that would begin calling for the change in the party. The first family would no longer have the luxury of being above board. They might face challenge something unprecedented in the party. There would be calls perhaps for change of leadership or at least for the first family to assume leadership on a full time basis. The voices of G-23 which were getting muted might see a fresh lease of life with more people joining them. In this context, it would be an existential crisis for the party. The space would then be sought to be captured by the other forces including the Nationalist Congress Party, the Aam Aadmi Party or even the Muslim groups like Owaisi or Siddique or Muslim League.

 

To the regional parties in Tamil Nadu, it is the DMK which has a greater stake. A defeat for the party might put it in peril since it would be the third consecutive defeat for the party. AIADMK might be facing anti-incumbency and also possibly challenges to leadership post election in the event of a defeat. If AIADMK were to win, then the CM E Palaniswamy would become more powerful. On the other hand, a defeat might lead to calls for Shashikala to take over the party. DMK too is undergoing struggles which might be overlooked if Stalin manages to retain power, else the intra-party battles might turn ugly. In Kerala, the LDF might be sitting pretty, yet given the intricacies of Kerala politics, nothing can be said till the last minute. It is the final bastion of the Left and thus has more than enough stakes to retain power. What is of significance would be the position of the Muslim League in the event of an UDF defeat. The Muslim say in the government would be over. It might result in the party breaking away from UDF either charting its own course or shifting to LDF. This would have more than enough impact on Rahul Gandhi’s fortunes in Wayanad, the seat he chose faced with the threat from Amethi.

 

As one looks at the preview of the elections currently underway, they will in all likelihood set in motion some new dynamics in the Indian polity. This dynamic mostly related to the place of the Congress in the political circuit would be unsettled and possibly new order might begin to emerge. Therefore for this very reason, the elections would be watched with keen interest.

 

 

 

 

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