Thursday 4 December 2014

Mr Mudit Kapoor's Talk at IIMA

Today I was fortunate to attend a brilliant, and in some ways iconoclastic talk by Prof Mudit Kapoor on the economics of reservations in a democratic setup. The gist of his argument seemed to be that reservation should not be used as a common tool to fix representation issues, but like the usage of any other tool, one should understand the nuances before applying it.

His first argument was that reservations are essential to clear market failures arising from the majoritarianism in-built in the democratic setup in those cases where such a majoritarian approach leads to a sub-optimal social outcome. Case in point, the policies that women want are often different from the policies that men want. But since men are in the majority and the median vote casters' policy preference will be towards what men want, women's policy preferences may not be represented in the elected body. The cost of a woman contesting for elections was assumed to be greater than the cost of a man standing in elections (due to social constructs extant in our system).

He used data from the Election Commission to show that there are more women contesting in elections in the Bimaru states than in the more "equal"(in the sense of sex ratio) states of South India. Common sense would suggest that a more equal society should have more equal representation. But he rightly points out that the equality of representation is one of ideas and not sex. In the southern states, the rights of women are already sufficiently addressed by the policies of the men in power because women are considered an integral part of the electorate. Hence there is no need for a woman to contest in an election to be heard - all she has to do in these states is to go out and vote.

Now consider the Bimaru states. In these states, since women are not heard through their vote, the disutility arising from electing males is greater than the cost of contesting, therefore more women contest in these states.

Using this, we can make a policy rule saying that if, in a state, we see more women contesting and not winning, this is probably indicative of a need for recognition of women's rights and therefore the reservation needs to be given to these states and not to all states on a rotation basis as mandated by the current form of the Bill in Parliament.

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