T C A Srinivasa-Raghavan: The credibility of governments

OKONOMOS

It is not enough to be in power. To be effective, a government has to be credible as well.

For any government to succeed, wielding power is only the half of it; the other half is credibility. Thus, while the Mamohan Singh government has been in power for almost four years, it has almost no credibility left. But even its worst opponents would have to grudgingly concede that it is well-motivated in most things it does.

In contrast, Narendra Modi and Buddhadeb Bhattacharya appear to be credible, whatever their critics might say about that. Their motives, though, are more open to question. Both appear to inspire more fear than trust.

In a recent paper*, Adrian Vermeule and Eric A Posner of the Harvard Law School have analysed this question of credibility and motives. In a nutshell, they say that while it is necessary to have the best motives to be credible as a government, it is not sufficient.

"Legal and constitutional theory has focused chiefly on the risk that voters and legislators will trust an ill-motivated executive," they say, and go on to pose the opposite problem: what if they don't trust a well-motivated executive? The Left's attitude to the nuclear deal is a perfect example of this sort of outcome.

Thus, without "some credible signal of benign motivations voters will be unable to distinguish good from bad Executives and will thus withhold discretion that they would have preferred to grant, making all concerned worse off."

I might add here that it was Indira Gandhi who first engendered and then fostered this in India. Before her time, there was a greater willingness to allow the government more, rather than less, discretion.

This "making all concerned worse off" is the problem that should worry all of us. It is, if you will, an extenuated form of a non-cooperative game in which everyone loses "" that too hugely.

The issue, therefore, say the authors, is for the government to convince the voters, whether in or outside the legislature, that it means well. They say this can be done in a variety of ways such as with "independent commissions within the executive branch; bipartisanship in appointments; counter-partisanship, choosing policies that run against the preferences of your own party; increasing the transparency of the executive's decision-making processes; and a regime of strict liability for executive abuses."

The problem with our governments, both at the Centre and the states, is that they simply refuse to do any of these things. For example, the Congress party is so selective that it has almost zero credibility, which is why it loses elections and can't push through even good legislation. It is willing to trust one set of opponents "" the Left "" but not another, the BJP.

Politicians will ask if the cost of attaining credibility is justified by the benefits. The authors say that a great deal would depend on the particular mechanism adopted. Signalling, they say, instead of coming clean, is very costly.

Costs also arise because governments have to depend on agents, such as the bureaucracy, "who themselves may be ill-motivated," or, as seems to be case in India, simply incompetent. You may get someone "blowing the whistle" merely over some strong disagreements rather than over actual mala fide; journalists do their bit to add to the cost by their own biases and incompetence; and so on.

A government may think it has lost control if it involves too many "outsiders". In the end, say the authors, it all comes down to motives. "The well-motivated executive may be more willing than the ill-motivated one to trade some loss of present control for increased future discretion." The Left in India, however, has shown that such governmental fears are completely justified.

There is also the question whether the head of the government is willing to pay the costs of credibility. Manmohan Singh was. But he was taken for a ride both by his own party and the Left. His anti-thesis was Narasimha Rao.

*The Credible Executive, Harvard Law School Faculty Scholarship Series Year 2006 Paper 4, http://lsr.nellco.org/harvard/faculty/papers/4/