Sunday, July 25, 2021

Boris Johnson is taking a big gamble with ‘Freedom Day’ -- my latest Mint column

With their usual flourish, British tabloids dubbed 19 July as “Freedom Day”, or, more prosaically, the day that the United Kingdom entered stage four of its re-opening plan. This was the day, delayed by four weeks, on which most remaining COVID19 pandemic-related restrictions were lifted in the UK. Some restrictions remain, such as the need for workers to self-isolate if they are pinged by the official contact testing and tracing app, and local bodies continue to impose their own restrictions — such as mandating mask use on the London Underground. But, in the main, most pandemic-era restrictions are gone: mask use is now voluntary, not compulsory (except where otherwise mandated), social distancing (already honoured in the breach rather than the observance for the past many weeks) is a thing of the past, and capacity limits have been lifted at restaurants, concert halls, theatres, and other public places.

There is much that can be criticized in British Prime Minister Boris Johnson’s handling of the pandemic, and there has been much criticism by epidemiologists and other experts of the decision to go ahead with a full re-opening, in the face of sharply rising infections, and, even more worryingly, upticks in hospitalization and deaths, due, in large part, to the ubiquity of the delta variant, which is highly transmissible and has greater immune-escaping properties than the conventional COVID19 virus — meaning that it is possible for those already fully vaccinated to become infected. Additionally, while the full vaccination rate in the UK is about 50 percent, those under 18 have not been vaccinated. Anecdotal evidence, too, suggests that, despite almost half of all Britons now vaccinated, some parts of British inner cities, including London, have vaccination rates less than 30 percent. All of this spells potential trouble.

In light of this, it is striking that in a video message shared on 18 July via Twitter , UK Prime Minister Boris Johnson offered this rationale for the re-opening, in the form of a rhetorical question: “If we don’t do it now, we’ve got to ask ourselves, when will we do it?” As he also remarked, due to the high vaccination rate (but recall the caveats I noted above), new infections have now largely been decoupled from new hospitalizations and increased mortality. A similar logic has underpinned the elimination of pandemic-era restrictions in a number of states of the United States — mostly the “Red” rather than “Blue” states, that is, those with Republican rather than Democratic governments — and the same underlies the sentiment increasingly heard from political conservatives in the Anglo-American sphere, that, post-vaccination, COVID19 should be seen as another, albeit an especially, nasty flu, and cannot be the basis for lockdowns and restrictions without end.

As your columnist has noted on previous occasions, lockdowns and other restrictions intended to flatten the curve of COVID19 infections pose a difficulty very similar to that posed by the deployment of unconventional monetary policies, most notably “quantitative easing” (QE) after the global financial crisis: how and when does one exit? Just as the unwinding of QE was repeatedly delayed in the US and other countries, and then put into reverse by the onset of the global COVID19 pandemic, exit from lockdowns and restrictions have either been open-ended or continually extended in most advanced Western countries.

The difficulty in finding the correct time to exit from restrictions and re-open the economy is, at one level, a matter of the trade-offs between the economic, psychic, and other benefits of earlier re-opening being weighed against the costs of increased infections, hospitalizations, and deaths, similarly due to re-opening, and as predicted by all of the standard “agent-based” epidemiological models (although the deficiency of these class of models, in ignoring behavioural responses by the public, have also been noted by your columnist).

But, this is not the whole story. An additional rationale for prudence comes from political economy considerations. I would hypothesize that, other things equal, if an earlier re-opening goes well, the public is likely, at best, to look perhaps a little more favourably on the incumbent politician who went ahead with it. On the other hand, if things go badly, the incumbent is likely to be severely blamed by the public for a premature re-opening.

This crucial asymmetry in the “payoff matrix” (in the jargon of game theory) to the incumbent politician between the two scenarios will naturally induce caution, likely greater than would be warranted on the basis of a scientific benefit-cost analysis alone. In simpler terms, re-opening earlier with things going well may give a little fillip to the incumbent, but will not guarantee re-election, while things going badly will almost certainly spell disaster at the polls. It is, thus, much safer for a prudent politician, with an eye on the next elections, to be excessively cautious and delay re-opening beyond what would be necessary from the point of view of what is good for society.

A perfect example of this is the continuation of lockdowns and other restrictions in Canada, the caution of whose political leaders contrast sharply with the UK; striking, given the similar full vaccination rates in both countries. There is no doubt that Johnson is taking a big gamble with Freedom Day — you can be sure political leaders the world over will be watching with great interest.

Vivek Dehejia is associate professor of economics and philosophy at Carleton University in Ottawa, Canada.

Sunday, July 11, 2021

My take on Modi's cabinet reshuffle.


Speculating on, and then dissecting, a reshuffle in the Union Council of Ministers is a parlour game for political analysts and observers, but what consequence is there for the rest of us? In other words, apart from gossip on “who is in” and “who is out” and why these changes may have occurred, is there any reason for more than passing interest by those of us who do not sit in the Delhi durbar of one or the other politician (either on the way up or the way down) of any particular political stripe and who thus may have a personal interest in the matter?

The short answer is: not really. As long back as 2015, during the first year of the first term in office of Prime Minister Narendra Modi’s government, I wrote a column in these pages asking, “Do expert ministers lead to better policy outcomes?” (16 January 2015). The context at that time was a volley of criticism against Smriti Irani, who was at that time was Minister of Human Resource Development, and the basis of the criticism was that she did not hold a university degree. There was also widespread praise for Jayant Sinha at that time, who was then Minister of State for Finance, given his background in management and finance.

Since that time, there have been several cabinet reshuffles, most significantly, of course, in Modi’s second term of office that commenced in 2019. But would one say that the appointment of X or the removal of Y from ministry A or B has had a marked impact on the overall public policy record, whether good, bad, or indifferent, of the Modi government? One would be hard-pressed to answer “yes”.

As my 2015 piece argued, the notion that expert ministers make a difference, while it sounds intuitively appealing, is difficult to find in the data, when one studies Cabinet systems of government in various countries and various points in time. The one exception appears to be a time of economic or financial crisis, such as after India’s crisis in 1991, when having a finance minister and/or central bank governor with expert credentials appears to make a difference — but not for the reason that you might think, but rather that the appointment of a domain expert sends a signal to the financial markets that the government is serious about fixing the underlying problems that led to the crisis. So perhaps domain expertise is, at best, more about signalling than it is about any concrete difference that a particular individual makes in a particular ministerial post.

There is an additional reason worth noting. As your columnist has observed on numerous occasions, our inherited Westminster parliamentary system of government is remarkably malleable. Thus, at a time when the leading party depends heavily on the support of coalition partners, such as during the two terms of Prime Minister Manmohan Singh (2004 - 2014), appointments to the Council of Ministers could be seen as carrots to other parties in the coalition. Ministers, in such a situation, may have actual clout, and thus could make a tangible difference, as their position cements a coalition partnership. But, as we have seen during the Singh years, this is a mixed blessing: some of the alleged corruption scams of those years, as the reader will recall, were blamed on Singh’s inability, or unwillingness, to sack non-performing or otherwise problematic ministers, for fear of upsetting the coalition dharma.

The situation is very different under the current government. Unlike the Singh years, characterized by a weak prime minister whose remit was limited to “policy” but did not include delving into “politics”, Modi’s Bharatiya Janata Party has led strong majority governments in both terms. Another interesting feature of the Westminster system is that, with a strong majority, overall Cabinet responsibility can morph into a quasi-Presidential system, in which the individual at the top, the Prime Minister, functions rather more like a chief executive than a first amongst equals. That has most certainly been the case under Modi, where it is no secret that important decisions are made, and routed through, the Prime Minister’s Office (PMO). Indeed, the burgeoning size of the PMO staff under Modi is a sign of its increased importance in the overall scheme of things. In such a situation, individual ministers are little more than placeholders, who may be shuffled around, while key decisions rest with the Prime Minister and are guided more by inputs from his advisers and senior bureaucrats in his office than they are by the ministers nominally in charge of the various portfolios.

There is nothing peculiar or uniquely Indian about this, and the current strong government, led from the PMO, is most assuredly not a sign of a weakening of India’s democratic credentials, as some foreign observers have suggested. Rather, it is precisely how the Westminster system functions when the governing party has a strong majority and is led by a strong prime minister who has a firm grip on his party. This would exactly describe the United Kingdom under Margaret Thatcher (1979 - 1990) or Canada under Jean Chr├ętien (1993 - 2003). Indeed, Chr├ętien, a French Canadian, centralized power so much in his PMO, with his ministers largely ciphers, that he was ironically dubbed the “sun king”, in reference to the absolutist French monarch Louis XIV.

All of this is worth remembering as some of us play the parlour game of deciphering the meanings behind the latest reshuffle.

Vivek Dehejia is associate professor of economics and philosophy at Carleton University, Ottawa, Canada.