Ep 114： Crime in Indian Politics

Before you listen to this episode of The Scene and the Unseen, I have a recommendation for

you.

Do check out Pulliya Baazi, hosted by Saurabh Chandra and Pranay Kottaswane, two really

good friends of mine, kick ass podcast in Hindi.

It's amazing.

If you're listening to the show in India, pause for a moment and answer this question

for me.

Is your local member of parliament a criminal?

Firstly, there's a fair chance you may not even know who your local MP is, which illustrates

the apathy that many Indians feel towards politics.

And apathy that's entirely rational, by the way.

But if you do find out your MP's name and look into his record, you'll find that there's

a one in three chance that he has criminal cases filed against him.

I would in fact surmise that even those MPs with no criminal cases against their name

have done something criminal at some point or the other.

If not, why would they want to be an MP and how would they get there?

In modern India, crime and politics go hand in hand.

And for a politician, a criminal record is a feature, not a bug.

Welcome to The Scene and the Unseen, our weekly podcast on economics, politics and behavioral

science.

Please welcome your host, Amit Barma.

Welcome to The Scene and the Unseen.

As India gears up for elections in this hot, sweltering summer, it's a good time to look

at one facet of Indian politics, the high level of criminality in it.

One third of the members of parliament elected in 2014 have criminal cases filed against

him.

And criminals actually have a better statistical chance than non-criminals of getting elected.

I found this out from a fascinating book called When Crime Pays by the brilliant political

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scientist Milan Vaishnav.

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Milan is a director of and senior fellow at the South Asia Programme of the Carnegie Endowment

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for International Peace.

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He's also the host of a superb podcast, The Grand Tamasha, which is co-produced by the

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Carnegie Endowment and the Hindustan Times, and focuses, as the name indicates, on these

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general elections.

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It'll be linked from the episode page for this episode.

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Before I begin my conversation with Milando, let's take a quick commercial break.

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This episode of The Scene and the Unseen is brought to you by Storytel.

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I actually use Storytel myself regularly, so as long as they sponsor the show, I'm going

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to recommend one book a week that I love, since my guest today is named Milan.

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My recommendation today is by an author named Milan.

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Milan Kundera is one of my favorite 20th century novelists, and one of his best books is available

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on Storytel, The Unbearable Lightness of Being.

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Kundera's books stay with you long after you finish reading them, and in this case the

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movie based on the book is one of my favorite film adaptations.

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The Unbearable Lightness of Being, the movie, was made in the 1980s, directed by Philip

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Kaufman and starred Daniel Day-Lewis, Lena Olin, and the gorgeous Juliette Binoche, my

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childhood crush.

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But read the book first, only on Storytel, and remember you get a 30-day free trial if

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you go to Storytel.com slash IVM, remember, a Storytel with a single L. Thank you.

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Milan, welcome to The Scene in the Unseen.

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Thanks for having me.

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Before we get to the subject of this episode, you're doing this awesome political podcast

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with the Hindustan Times.

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So why don't you tell us a little bit about these elections?

What's happening?

Who's going to win?

Small question.

So I think things look very different today than they did even at the start of 2019.

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And we are recording this, by the way, on March 18th.

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This episode is going to be released on April 1st, so a lot could have changed.

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Kindly don't hold Milan responsible for anything.

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That's right.

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Don't forget, by the time May 23rd comes around and we've counted votes.

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I think that the momentum has shifted quite significantly towards Modi and the BJP.

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And it's not only because of the events at Pulwama and the aftermath, although I do think

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that that was a net positive for him.

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But I think as we've moved towards the main campaign, Modi's attributes, his claim to

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fame, decisiveness, leadership, nationalism have come to the fore.

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And here I think we see the opposition's weaknesses in terms of both coming up and

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answering the leadership question, but also trying to articulate a cogent counter narrative

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to what Modi and the BJP have to offer.

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And I think for many Indians, when they look at the opposition, a lot of their charges

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seem rather petty because I think in the most parts of this country, certainly North India,

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maybe less so in South India, Modi is popular.

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People like him.

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People would like to believe that he has their best interests at heart, that he has clean

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intent.

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They're willing to forgive quite a lot of policy missteps, whether it's GST, demonetization,

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various other grievances with respect to the economy, and instead focus on the positive.

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So I think what the recent Balakot strike does is to give people who are hunting for

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an excuse to support Modi, give them a reason to vote for him on election day.

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Now, I am an armchair commentator based in a city, so whenever someone asks me, what

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do you think is going to happen in the election, my honest answer has to be, listen, I don't

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have a clue because it's just so many, it's a conglomeration of local elections.

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There are so many factors in play and it's incredibly hard for someone like me to have

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a sense and to leave my biases aside.

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But as a political scientist, you're obviously looking beyond all of that and you're trying,

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what's the kind of data you look at?

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What are the kind of trends that you look at to try to get a sense of what is really

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happening in the country?

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So obviously, there are huge questions around the validity and accuracy of survey data because

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we have too many instances in the past where surveys have gotten things wrong, both in

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terms of vote share and in terms of seat share.

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But I think the way in which one can look at survey data is to look at trends because

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they do tend to be kind of correlated with one another.

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So you could see very clearly from, say, the height of the BJP's power post with the British

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to where we are today, definitely a sort of narrowing of the race.

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And then more recently, again, a widening and I think I expect that widening will either

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grow or kind of stay the same, barring major unforeseen events in the next couple of weeks.

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So I think that's one.

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I mean, I think the second is trying to go beyond the sort of horse race of, you know,

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this leader said X and the other leader said Y, but look at some of the underlying trends,

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whether it's with young voters or female voters, their participation, what they're saying matters

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to them.

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You know, for instance, one of the striking things about 2014 that we were able to detect

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pre-election, not that we had foreseen a single party majority of the size, I don't want to

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claim credit for that because I didn't, but that there was a surprising convergence in

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priorities among rural and urban dwellers.

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They both were saying the exact same things matter to them.

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The top three issues in both types of places were price rise, lack of sort of development

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jobs and corruption.

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Now, the precise ordering of those three questions might vary from Talanadu to, you know, Bihar,

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but they were always the top three issues, both in urban and in rural.

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And there are people who sort of say that, you know, for example, just to pick one of

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those issues, which is development, that people who cited development to vote for the BJP

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were actually rationalizing or putting a respectable face to their innate bigotry or whatever the

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case might be.

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And they were really voting for other reasons.

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I mean, so how does one really know why are people really voting?

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What are the forces at play here?

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Because there are a lot of complex forces at play here, which will not show up on this

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kind of survey data, right?

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Because you will never see these sort of trends.

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Right.

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No, I mean, I think, you know, one of the major problems in survey research is what

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social scientists call social desirability bias, right?

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Basically a numerator knocks on my door and asks me a bunch of questions and I don't want

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him or her to judge me in the wrong way.

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And so therefore I sort of tell them, you know, what I think they want to hear.

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So I think that obviously is an issue.

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There's ways of getting around that through experimentation.

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You know, there's survey experiments where you sort of give people vignettes or different

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kinds of prompts and see kind of what changes their things.

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So some people have tried that.

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I think the other thing though, just on the economy, you know, I'm one of these people

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who believes that there has been a shift in the Indian electorate, that traditionally

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there's been this truism that good economics doesn't make for good politics.

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That if you look over the vast stretch of post-independence history, particularly when

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we have data, say the last three, four decades, that there's no apparent correlation between

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a government's economic performance and how that incumbent does at the time of election.

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But what's interesting is if you start disaggregating that relationship by decade, you see actually

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starting around the year 2000, there is much more of a close correlation.

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In other words, there are positive electoral rewards to better growth.

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Now, is this an extremely robust and strong relationship?

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No.

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Can it explain all the variation?

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Not at all.

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But I do think that there has been a subtle shift.

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You know, part of that is once people taste the fruits of rapid growth or high growth,

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they start to demand more.

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So one of the puzzling things about this election, if Modi and the BJP come back to power, is

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clearly growth has been very uneven.

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And so what were the other factors that were shaping the electorate in this race beyond

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just sort of bread and butter issues like growth, jobs, inflation, and so on?

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And I think the other, just to sort of add to that, even if there are more people in

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the electorate who are claiming a concern for economic issues, that doesn't necessarily

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mean that they'll promote the right kind of policies.

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For example, if you ask a farmer today, what do you want most?

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Do you want a Hindu Rashtra?

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He'll probably say, no, no, man, I just, you know, do something about the economics.

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I want development.

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But what he has in mind is farm loan waivers, which are just a short-term fix and not any

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of the structural reforms that we actually need.

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So you know, I think, I mean, this is very relevant to the current prime minister because

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in 2014, you know, Modi became something of a Rorschach test.

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We all sort of projected onto him what we wanted to see, right?

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So some people saw the Hindu strongman of 2002.

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Other people saw kind of a more market-friendly, libertarian-minded, you know, kind of modernizer.

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And in reality, we've sort of got, I think, something that's closer to the middle.

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You know, he was very careful in the run-up to the 2014 polls of not really saying all

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that much in terms of specific policy, right?

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It was sabkasat, sabkavikas.

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It was good governance.

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It was rejuvenating the Indian economy, right, making India kind of a world leader on the

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global stage once again.

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I mean, these were sort of platitudes.

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And then I think we all filled in the blanks with the kind of policy menus that we hoped

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he would sort of pick up.

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And now that we know that, and would you therefore say that if your contention is that people

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do care about economics, would you then say that maybe the Congress missed the trick a

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little bit here by focusing on Rafael, by focusing on Pulwama and so on, when they should

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perhaps just have been talking jobs, jobs, jobs, where are the jobs?

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One of the most enduring mysteries about this campaign cycle is why the Congress has not

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just done that.

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In my personal view, I think they've wasted a lot of time with the Rafael scandal because

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I think frankly outside of a small coterie of people in urban metros, not that many people

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are either going to care or are going to be able to understand what the deal is about.

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We were talking about this before.

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If you asked a veteran defense expert to give you a 15 second soundbite on Rafael, I think

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he or she would really struggle.

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And so I fear that for the Congress, they're also falling into the same trap now with this

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Pulwama thing.

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Talking about China, how is this government not able to get China to vote in the UN Security

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Council to sanction Masood Azhar, the head of J.S.

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Mohammed, criticizing Ajit Doval for his hand in getting Masood Azhar back as part of the

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hostage exchange.

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These are losers in terms of issues for the Congress.

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I think that they should instead focus and Priyanka Gandhi did this in Ahmedabad the

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other day talking about jobs, agrarian distress and so on and so forth.

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But it may be too little too late.

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And I think the other thing that is hurting the Congress is they don't seem to be able

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to articulate a kind of alternative future.

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So what is it that they would do if they came to power?

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So we see some strands of ideas, more loan waivers, a better income support scheme.

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But I think a lot of folks have sort of lost confidence that on the ideas front anyway,

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they have a clear sense of what they would do if they came to power.

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Let's kind of move on from talking about these elections to a subject that actually affects

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all the parties, where all the parties are really equally guilty, which is crime in politics.

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As your book describes in such detail, you know, criminality in politics is not restricted

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to this party or that party, despite all the noises that Modi made in 2014.

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The BJP is as guilty of it as anyone.

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And interestingly, people seem to think it's a problem in the Hindi heartland.

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But as your book shows, it's spread out all across the country and it's got deep structural

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reasons and I found all of that very fascinating.

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And I was quite taken with your approach to handling this issue, which was to think of

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Indian politics in terms of markets, to talk about the political marketplace and examine

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the incentives within that marketplace.

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And then from there figure out why we are where we are.

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So how did you sort of arrive at that approach, that way of looking at this problem?

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So you know, I went in very influenced by what the global literature says.

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And if I had to summarize the prevailing wisdom in the political economy literature, it's

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basically about information that where voters lack adequate information about the candidates

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they're voting for, they are liable to choose, quote unquote, bad candidates, bad meaning

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corrupt, dishonest, tainted, criminal in some way.

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And so if you just give them that information, they're able to update their calculation

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and choose, quote unquote, good politicians who are the kind of honest or non criminals.

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And so I had begun to spend some time with voters and political campaigns in India.

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And what I quickly realized is that wasn't the story.

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Many people were voting for these criminals and they had this information, but there was

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another reason they were doing so.

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And so then I started to think about this question of the demand.

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Where does the demand for this kind of a figure, whether it's a Papu Yadav or an Anand Singh

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or some of the people I talk about in my book.

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And where do these people come from?

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Right.

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I mean, at the end of the day, it's parties who are giving them tickets.

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It's not, you know, if you're an independent in this country, it's very, very hard to win

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elections.

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I mean, the independents historically have performed very, very poorly.

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And so that's really how I backed into this demand supply framework.

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And then I sort of thought, you know, let's try to, it's almost like an onion that you're

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peeling the layer successively, you know, to try to get at the core of the story.

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But you know, I came in at thinking I knew what the answer was only to be very quickly

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proven wrong.

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And that put me at odds with what other people, you know, in the academy were sort of saying.

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But I thought it was rather unfair to transpose, you know, all the work that had been done

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on other countries and just say, well, you know, India probably is the same.

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No, and it's, it's struck me while reading it that it's a very fine work of public choice

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economics and you're a trained political scientist.

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So let's take a detour for a moment because I meant to ask you about this.

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Tell me a little bit about, you know, how you became a political scientist and what

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are the kind of things you studied before this?

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Sure.

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So I studied politics and economics as an undergraduate in the U.S. and I didn't really

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know that you could make a career out of that.

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I just thought, you know, I'm interested, this is sort of a hobby.

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And I ended up spending a summer interning at the Pentagon.

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And so my eyes were open to the different kinds of careers one could have.

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And then I stayed on for an additional semester and worked at a think tank.

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And so when I graduated, I was sort of bitten by the bug.

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I knew I wanted to come back.

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So I sort of, you know, worked the trenches as very lowly research assistant at a series

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of think tanks.

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But you know, think tanks and research institutes are a funny place.

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So there's a real caste system.

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You know, you're either the lowly researcher assistant or you're a fellow or a senior fellow

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carrying out your research.

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There's no middle class.

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There's no middle class and there's no social mobility.

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So I decided, you know, by default, I basically, if I wanted to kind of jump ranks, I was going

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to have to go do a Ph.D. And so I decided to do a Ph.D. in political science.

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But funnily enough, up until this point in time, I had never worked on India.

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As an Indian American, as the son of Indian immigrants, my natural reaction was to do

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the exact opposite of whatever my culture or family was.

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And so for years and years and years, I thought, who would want to do India?

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It's not exotic enough.

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You know, I know it already.

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Of course, none of those things were true.

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And I think it wasn't until I got to graduate school when I started to realize that, A,

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there's so much we don't know about India, B, that's a place where you can really make

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a contribution, and C, you know, Ph.D.s are six or seven years long in the states if you're

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doing political science.

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So this has to be something that is going to be both personally and professionally rewarding

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to you.

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And the light bulb just sort of went off and India kind of floated to the top.

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And so I spent a summer here in New Delhi working at CSDS, you know, who are the ones

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who do regular polling, and I'd never looked back.

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Right.

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And getting back to the book, When Crime Pays, so you essentially asked five questions in

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the book to try and figure out why our politics is so infested with crime.

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And of course, the first three have to deal with incentives, which is, you know, the first

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one is, why do criminals gravitate towards politics in the first place?

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The second is, why do parties choose to have criminal candidates?

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And the third is, why do voters vote for criminal candidates even when they know that they're

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criminals?

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In fact, like you point out that it's often a feature, not a bug, that they're voting

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for these guys because of their criminal backgrounds and not in spite of it.

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So let's kind of get to the first of those questions, which is, what are the incentives

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for criminals to get into politics?

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And you know, as you kind of pointed out in your book, that it wasn't always like this,

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that perhaps up to the 70s, criminals played a kind of a side role where they would help

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politicians, they would do boot capturing or mobilize voters and stuff like that.

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But at some point, something fundamentally shifts in the political landscape that prompts

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them to make the move themselves.

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Tell me about this.

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That's right.

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So if you go back and read the earliest reports of elections in 1952, in the early 50s, you

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see in the election commission's official reports, you know, scattered mentions of the

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use of kind of gundas on the part of politicians and political parties to suppress voters.

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If you think they're going to vote against you, to mobilize voters, to capture boots,

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to kind of do the dirty work of politicians.

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And that starts to increase, it's pioneered by the Congress and then people start to sort

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of copycat what the Congress is doing.

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But they're very much at the periphery of politics.

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They are not the candidates, they are sort of the hired guns.

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And the quid pro quo there is, look, if we come to power, we'll protect you.

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But you've got to do this, you know, for us.

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So the incentives were totally compatible.

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Several things started to change slowly over time at first.

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One is that you start to see the rise of identity politics.

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And so some of these caste expressions get mobilized and activated.

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And these gundas are forms of that expression.

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By and large, a lot of the politicians were still from the Hindu upper castes.

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Number two is you start to see a hollowing out of the state apparatus, particularly the

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law and order institutions.

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And money becomes more important as the population is growing and candidates are trying to sort

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of woo voters.

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But where you really see this kind of critical break is around the Indira's time in the 1970s,

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where at that point, two things happen.

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One is that the Congress system starts to collapse under the weight of its own contradictions,

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which then opens up political space for these political entrepreneurs to rush in and grab

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a piece of that.

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Elaborate on that a bit.

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What's the Congress system?

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So the Congress system essentially was, you know, this very cultivated sense of a system

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of sort of patronage and clientelism overseen by the Congress, which, you know, meant that

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the Congress had reasonably good local party organizations and political networks.

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Over time, as Indira begins to centralize more power in her own hands, some of these

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networks start to atrophy.

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Now, there's an underlying weakness already generating because, again, as I said, the

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Congress claimed to represent everybody.

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But in fact, if you look at who the politicians were who actually were on the ballots got

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elected, it tended to be from a relatively thin band of society.

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So there was already some sort of disenchantment.

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And a lot of these criminal entrepreneurs realized that over the years they had accumulated

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resources.

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They could accumulate black money and they knew how to move it around.

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That they became the mediators between the state and society, but yet they weren't getting

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any of the credit.

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They weren't getting the financial rents necessarily because the politicians were taking

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their cut.

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They weren't getting the ego rents or the psychological rents because at the end of

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the day, they were just, you know, the kind of hired gun.

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And so they decided in the book, I use the kind of analogy of, you know, vertical integration,

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right?

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So when a manufacturer decides that, you know, I'm building cars, I should take advantage

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of economies of scale and start to manufacture my own tires.

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Criminals essentially started to do that.

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So you start to see, particularly in the 1970s in the post-emergency time, criminals themselves

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directly standing for election, you know, and they say things like, look, everyone was

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coming paying their respects to the politician and we were getting nothing, but they rely

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on us.

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So why don't we just cut out the middleman and just sort of do it ourselves?

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And so that system starts to rapidly escalate.

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And one of the things that Indira Gandhi did, which now when we look back was extremely

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harmful to India's political economy, is she banned corporate donations to political parties.

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Now that sounds to some people maybe like a good thing, but essentially what it did

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is then shifted all political funding underground and she never replaced it with something else.

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In Europe, they've replaced it with the public financing system.

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And so then there really was a premium on how do you aggregate and move this black money

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and criminals had an advantage there.

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And so we're still living with the legacy of that policy decision.

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As you know, most money which gets spent in election time is unaccounted for, right?

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So we have official estimates, but we know that the actual numbers are probably 10X,

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you know, what politicians themselves report, if not more.

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And you know, another factor that you mentioned while analyzing the incentives of the criminals

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themselves is the rise of anti-incumbency, that it was far more common in the 50s or

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60s to retain your seat, but as anti-incumbency went up through the late 60s, 70s, 80s, what

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inevitably happened was that if you were a criminal don, like you talk about how the

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gundas became dadas, so let's say you're a dada of your neighborhood, rather than help

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one politician and then in the next election he goes out of power and you're on the outside

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again, why not just make sure you are part of the system and you stand instead and you

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make as much money as you can and all of that.

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Yeah, that's really a central characteristic.

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You know, when the Congress was so dominant, if you were the gunda the night before the

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election day, you could sort of sleep easy, you could rest easy because odds are that

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your Congress politician you work with is going to come back to power.

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Once that uncertainty increases, you're in a dangerous situation because if that patron

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of yours loses, then both the state and the opposition, which knows about your dealings

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with the Congress, could come after you.

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So they essentially decided, why don't we just take our own fate into our own hands?

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And that's what they decided to do.

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And of course, very soon they realized that this wasn't just politically profitable, it

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was also economically profitable.

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And you've got a great chapter which talks about exactly how economically profitable

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it is, which is where you coined the term rents raj, is that your term?

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That's not my term.

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I think the rents raj came first, well, there was the resource raj, which is actually a

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term that Raghuram Rajan came up with.

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And the rents raj was something that the former chief economic adviser Irvin Subramaniam sort

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of adapted, you know, from what Rajan said.

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So tell me sort of about the different kinds of rents.

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So can you first define rent seeking for me for those of my listeners as well?

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Yeah, I mean, I think it's basically, you know, how do you make money without having

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to do very much in, by the way, a productive activity, right?

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I mean, so people who they want a free lunch, I think that's one way of thinking about

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it.

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And so, you know, what I talk about in the book is that, you know, you have these quite

1642

powerful changes in Indian political economy.

1646

So you have the changing social makeup of our political class, the enfranchisement of

1652

Dalits and backwards and so on, you have economic changes from a more command and control economy

1659

to a more market driven economy.

1661

Politically, of course, you move from a one party dominant system to a more fragmented

1665

multi party system.

1667

But the one thing which really is constant throughout, you know, post independence India

1672

is the strength of institutions is always lagging behind those other changes that there

1679

really haven't been too many governments who have prioritized administrative and governance

1683

reform.

1684

And so in that delta between all of these pressures and aspirations comes in the opportunity

1691

to sort of, you know, make rents, right.

1693

And so when you have market opening in 1991, a lot of the ability to make money gets monopolized

1702

by people who are able to manipulate the leftovers of the regulatory sort of regime.

1709

So in some cases you have regulatory capture, in some cases you open up or you privatize,

1714

but you then don't re-regulate, which is often something that you have to do to make sure

1718

that there's not monopoly control.

1722

And so there's huge rents from regulation.

1726

There's huge rents also from extraction, right.

1728

So the whole topic of natural resources wasn't really something that was on the agenda in

1733

1991.

1734

And we saw the fallout from that in the UPA2 government, right.

1737

I mean, all of the major scandals involved, whether it was land, coal mining, telecommunication

1743

spectrum, which is a kind of natural resource.

1746

So not only do politicians wield a lot of power to trade regulation for bribes or campaign

1753

finance, but then they can also make a lot of money through these extractive routes.

1759

So that was the story, you know, of a guy like Madhu Koda in Darkhund, right.

1762

I mean, that's essentially the game he played.

1765

But this happens at a much smaller scale as well.

1768

So I mean, the thing in Mumbai obviously is, you know, why do you have this labyrinthine

1774

structure of licenses and permits to do anything in real estate?

1778

Well, part of the reason is because the politicians and the bureaucrats who control that need

1782

to fund themselves, and so they're able to kind of say, look, let's do a deal, I'll give

1786

you something and you give me something in return.

1789

And you kind of talk about the different, the three different kinds of rents.

1792

And obviously, the first of those is something that is pervasive all through our history.

1797

It's probably a little more before 91, but it still exists, which is essentially regulatory

1801

rent, which, you know, I've had a bunch of episodes on different aspects of this, like

1807

restaurant regulation, for example, and so on.

1809

And it basically means every time you're paying a bribe to get something done, you're paying

1813

a sort of regulatory rent, or every time a business is paying a bribe to get a license,

1817

that's regulatory rent.

1818

And that's, you know, you come to power and you typically have a whole lot of these rents

1823

at your disposal.

1824

So you spend X amount getting to power and you can make three X or four X when you're

1828

in power and disperse patronage accordingly.

1831

But what's interesting is after 91, a new kind of rent explodes, which is extractive

1836

deliverance, and where you quoted Rajan, where he says that the licensed Raj has now become

1841

a resource Raj.

1843

And another interesting fact that I sort of found in your book was that while the number

1847

of billionaires expanded massively after 91, a significant percentage of them were in what

1853

you call rent-thick sectors, which is they are, in a sense, benefiting from that kind

1859

of what you'd call crony socialism.

1861

Is that correct?

1862

That's right.

1863

And this is work that Michael Walton, who's at the Kennedy School and others, have done

1867

to basically track billionaires over time.

1870

Now there has been a rise in billionaires in many countries.

1874

But one thing you notice about India in the post-90s period is, A, the number of billionaires

1880

relative to India's sort of per capita GDP.

1884

And the second is the sectoral breakdown of where they are.

1887

They are in these rent-thick sectors.

1890

So again, things like construction, real estate, petroleum, oil and gas.

1897

We think a lot about IT billionaires, but in fact, that's not where the bulk of the

1901

action has been over the past quarter century.

1906

And so that became a sort of hallmark, I think, of India's political economy.

1912

Right.

1913

And there's a third kind of rent you mentioned, political rents.

1915

Explain that.

1916

Yeah.

1917

I mean, I think here in political rents, I mean, obviously, there are two ways of looking

1925

at it.

1926

So one is when you're a politician, you are in a position to kind of extract resources

1934

to further your own career.

1937

So the standard example is you're a politician who has access to inside information about

1946

where a highway is going to go.

1948

And so therefore, you trade on that interest, either directly because you've set up a firm

1954

or your family member has set up a firm.

1956

And one remarkable fact about India is there's really no conflict of interest statute at

1961

the federal level here.

1963

So even today, members of parliament who have business interests, the only people that they

1970

have to declare those interests to are the parliament secretariat and the Rajya Sabha

1974

and the Lok Sabha, and those are private.

1975

So the secretariat knows, but the people don't actually know.

1979

So it becomes very, very easy to do that.

1981

And then the second, of course, aspect of political rents is this question of sort of

1986

campaign finance, right?

1988

And being able to accumulate resources in a way that gives you a leg up.

1995

And I think this is where the political parties come in.

1999

There is this question of, well, what is it that attracts political parties to criminals?

2004

In many societies, if you knew someone was tainted or tarnished because of some serious

2009

criminal case, you would sort of hightail it in the opposite direction.

2013

But in India, they actually are falling over one another to try to recruit these people

2017

to contest on their party labels.

2020

And that will bring us to the second question, which we'll come to after a short break.

2024

But before that, for those of my listeners who want an illustration of the first aspect

2028

of political rents that Milan just spoke about, consider the Bangalore Airport.

2032

Why is it so incredibly far from the city?

2036

Just look into who bought all the land around it before the location was announced.

2040

We'll be back after a short break.

2042

Hello, everybody.

2043

Welcome to another awesome week on the IVM Podcast Network.

2046

If you're not following us on social media, please make sure that you do.

2049

We're IVM Podcasts on Facebook, Twitter and Instagram.

2051

Please please do.

2052

With the upcoming election season just around the corner, in case you really wanted a deep

2055

dive into some of the issues that matter, you should check out some of the shows on

2058

our network.

2059

You'll find Ganatantra, The Scene in the Unseen, the Prakati Podcast, Pudiya Baazi and even

2063

How Two Citizens look into some of the issues that really do matter.

2066

This week on Cyrus Says, Cyrus is joined by Tripti Kamkar.

2068

Tripti talks about how she got into acting from a young age, convincing her family, discovering

2072

her comedic talent and her very own podcast, Golgappa.

2075

On 0101, Varun Deshmande from the Good Food Institute joins us to talk about the Good

2079

Food Institute and the work that they're doing.

2081

On Thalde Harate, our Kannada Podcast, Pawan and Surya discuss the Indian judiciary and

2084

all that we need to know about its citizens.

2086

On Paisa Vaisa, Anupam hosts an hour long special with Anil Ganani, head of passive

2090

investments at DSP Mutual Fund and Mukesh Agarwal, CEO of NSC Indices, India's largest

2094

index and index service provider.

2096

This week, look out for the 50th episode of the Habit Coach Podcast, host Ashley Docter

2099

is joined by a special guest on this one.

2101

And with that, let's continue with your show.

2105

Welcome back to The Scene in the Unseen.

2106

I'm chatting with the political scientist, Milan Vaishnav on crime in politics.

2110

Why is there so much crime in Indian politics?

2112

And we take it so much for granted that honestly, if there wasn't so much crime in Indian politics,

2116

it would be a little surprise, right?

2118

So you know, we've already looked at sort of the first question that you raised or what

2123

are the incentives for criminals to come into politics.

2125

And it's because vertical integration, they want to look after the interests of all these

2129

rents to be made, regulatory rents, extractive rents, political rents.

2133

It's an absolute no brainer.

2134

You know, power brings money.

2136

If you're already a criminal, you want more of it and as much as you can.

2139

And why experience it second hand or third hand, just get the real thing.

2144

But why do parties pick criminals as a candidate?

2148

So I think to understand the answer to that question, you have to go back and think about

2153

how the landscape has changed in recent decades.

2157

And one of the most striking changes has been the growth in the cost of elections, right?

2163

And the cost of elections has grown for numerous reasons.

2166

One is just population growth, right?

2168

The second is the competitiveness of elections has really increased over time.

2174

If you just look at the margins of victory in state and national elections, you know,

2179

they've come down quite significantly over time as the political landscape has become

2182

more crowded.

2185

Voters also have certain expectations.

2187

In most places, as many of your listeners in India would certainly know, on the eve

2192

of elections, parties and candidates fan out across the country and provide all kinds

2197

of goodies.

2198

It could be cash or liquor, the two most common, as a way of trying to woo voters to their

2203

side.

2204

And now we also have a multiplicity of elections, you know, when there are three million elected

2210

Panchayat officials in the country, right?

2212

So there's been an explosion in the number of elections.

2215

And so all of these things are kind of interacting.

2218

Now here's where we come back to rents.

2220

You know, parties are facing this fiscal crunch of how do we meet this financial challenge,

2226

but they don't want to necessarily dedicate themselves to the hard work of building party

2231

organizations, you know, recruiting members who are going to fund and so on and so forth.

2236

And so they've been increasingly thrust into the embrace of self-financing candidates.

2242

Now self-financing candidates, as the name suggests, are people who can fund their own

2246

campaigns, but they can do more than that.

2248

They would pay parties for the privilege of running.

2251

They would perhaps fund or endow candidates on the same party label who don't have their

2257

own resources.

2259

They might, you know, willingly engage or certainly at least look the other way if there's

2263

other kind of rent seeking going on.

2265

And so this is, you know, the match that's been made between political parties and wealthy

2272

candidates.

2273

Now, the question is, where do criminals come in?

2275

Because you know, an obvious question as well, you know, there are a lot of people in India

2279

with money, right?

2280

I mean, there's celebrities, there's film stars, there's cricketeers, there's whatever.

2285

Not podcasters.

2287

Not podcasters or political scientists for that matter.

2291

And you know, one thing that criminals have is A, they have liquid resources.

2297

So both the means and the know-how of how to move money.

2301

The second is they have a kind of organizational platform because they tend to be deeply embedded

2307

in the constituencies which they've come to represent, right?

2311

So they have those networks of people and personnel and supporters already at hand.

2318

And of course, there's some incentive for them in terms of protection to become part

2323

of the state.

2324

Now, in India, there is no formal immunity if you've been charged, cheated with a crime

2330

or even indicted.

2331

The question of losing your seat only comes if you're convicted.

2334

And even then, there are loopholes.

2336

But of course, everyone knows that once you hold a position of political power, there

2340

are various formal and informal ways to derail or delay justice.

2346

So it could be getting an official transferred, you know, sort of threatening punitive action

2351

if a member of the state tries to come at you.

2353

So they have both parties and candidates sort of have incentives to make this match work.

2360

I don't know why my mind suddenly went to a fellow Amit.

2364

But leaving that aside, I write limericks for the Times of India and one that I rather

2369

like that I've written for them a long time back is called politics and it kind of illustrates

2373

what you say.

2374

A Neta who loves currency notes told me what his line of work denotes.

2378

It is kind of funny.

2379

We steal people's money and we use some of it to buy their votes.

2383

And one of the interesting questions I had about this, which a book points out is that

2386

everything is secret ballot.

2388

So you could bribe a voter.

2390

But I always used to wonder that why is it that he will then, you know, take a bribe

2394

from party X and not just vote for party Y.

2398

And what your book sort of pointed out is that, look, you know, parties know this, that,

2403

you know, just by paying money to a voter, they're not necessarily getting the vote.

2406

But it becomes a hygiene factor.

2408

They know for sure that if they don't give him money, they're not getting their vote.

2411

So they have to pay money anyway as a kind of hygiene factor.

2415

And over time, a sort of Lake Wobegon effect kicks in and everybody has to pay more and

2419

more and campaign finances goes through the roof.

2422

And then what do you do?

2424

And these self-financing candidates come in and just take over the whole process.

2430

This is fundamentally the one big reason, right?

2431

Yeah.

2432

I mean, I think, look, we've done ourselves a great disservice by harping on this term

2437

vote buying because it's not an accurate description of what's going on.

2440

I would prefer gift giving because the idea that you could buy votes is that there's some

2445

ironclad contract that you could sign with the voter saying, look, I'm going to give

2449

you 500 bucks and you're going to vote for me.

2451

Now, as you said, with the secret ballot, if I'm a savvy voter, I'm getting 500 bucks

2456

from you and the next guy and three other people, and then I'll vote my conscience.

2460

But what politicians believe is that if they don't give money, they certainly will lose.

2467

So money doesn't buy you victory.

2470

It buys you a seat at the table.

2472

So the analogy that I use, it's sort of like playing poker, right?

2475

If you're playing poker with your friends and you want to get dealt a stack of cards,

2479

you've got to ante up.

2480

You've got to put something in the pot.

2481

Now, just because you've ante up and you've given some money doesn't mean you'll win,

2485

but you have no shot at winning if you don't do that because you won't be at the table.

2489

And so it's a kind of a classic prisoner's dilemma.

2493

Everyone would be better off if you cooperated and didn't give money, but the risks of defection

2498

are so high that if I choose not to give and Amit gives, then he's now at a competitive

2504

advantage.

2505

So I was actually a professional poker player for five years and a winning player.

2508

Did you know this?

2509

I did not know this.

2510

So why are you doing podcasts now?

2512

Well, long story, which I've spoken about on another podcast you've appeared on, Cyrus

2517

says, but just to sort of, if you'll allow me to counter what you just said, I think

2522

gift giving is a bit of a euphemism.

2523

I'd say it is vote buying and here's why.

2525

Of course they won't get the vote, but let's say they don't give the voter money.

2530

The probability of getting a vote is zero.

2533

If they give the voter money, the probability is non-zero.

2535

Let's say maybe it's 0.2, 0.3, whatever.

2538

So they're buying 0.2 or 0.3 of a vote.

2540

That's the expected value.

2541

So I'd still call it vote buying, except that it's not a full vote.

2545

It's a non-zero.

2546

Yeah.

2547

I think that's a fair way of looking at it, right?

2549

But there are some places in the world, and there's a lot of research from Argentina and

2554

other Latin American countries, where local party machines are quite strong.

2560

So you're able to monitor with some degree of measurement error what voters actually

2565

do on election day.

2566

And so therefore, that kind of quid pro quo might be easier to consummate.

2571

Here, the probability is lower.

2573

I think in India, it's lower.

2575

Right.

2576

Moving on from there, so far it's fairly logical that, okay, obviously criminals want to get

2580

into politics.

2581

Power is money.

2582

The Indian state has so much power in this question that it's just a source of unlimited

2586

rents.

2587

And political parties, which are the intermediaries in the marketplace between candidates and

2592

voters, to exist, they need money to fight elections, they need money, self-financing

2596

candidates are the best.

2598

And if a candidate finances himself, he is effectively subsidizing others, like you pointed

2603

out in your book, because the opportunity cost of the money and so on.

2607

The big question here is that we are in a democracy.

2612

Why do informed voters actually choose to vote for criminal politicians?

2616

In fact, one of the most surprising statistics in your book was that if you are a criminal,

2623

your chances of winning an election are far higher than that of a non-criminal.

2628

It is clearly a feature, not a bug.

2630

Why do voters vote for criminals?

2632

Right.

2633

So I think, just to rewind for one second, if you look at this association between money

2639

and criminality, what you see is that rich politicians do seem to be disproportionately

2647

rewarded, but criminal politicians who are rich seem to have an additional bump.

2652

So if money were doing all the work, then criminality shouldn't matter.

2655

So clearly there's something above and beyond, there's a delta there that's benefiting

2660

criminals.

2661

So what is that?

2662

And that's where I think the voters come into play.

2663

So I think there's kind of two cardinal facts about how Indian politics tend to operate.

2670

So one is that in many parts of this country, the rule of law is quite weak.

2677

And what I mean by that is that the government is not seen as an impartial or credible provider

2684

of kind of core state functions.

2687

So public goods delivery, law and order, justice, and so on.

2692

So that's one.

2693

There's a vacuum there.

2694

Now number two is that obviously we know that identity politics and social divisions are

2702

a prominent feature of Indian politics and that it varies from place to place.

2706

In some places, the divisions or the contestation between caste groups and communities may be

2711

lesser, maybe more.

2713

But in those places where the rule of law is weak and those social divisions are highly

2719

resilient, criminals are able to use their criminality essentially as a sign of their

2725

credibility to get things done for their constituents, right?

2728

So they're basically able to say, if you support me, I'll be able to do your work by hook or

2735

crook.

2736

Now, the pitch they're making is not necessarily to the constituency at large.

2741

It's primarily to their own caste or community and those allied groups, right?

2747

And because we're in a first past the post system, you know, you can win an election

2752

with 25 or 30% of the vote.

2755

So you don't have to cater to the median voter, right?

2758

If you could get your group and a few others on board, then you could cross the finish

2763

line first.

2764

So in some ways, the electoral system also creates, you know, further incentives.

2770

So this kind of reverses the usual logic of information on its head, right, which is voters

2778

actually know and candidates who are criminals have an incentive to advertise that they have

2784

these characteristics because it's seen as an asset in many parts and not a liability.

2790

Just to sort of then unpack those two points.

2791

The first point is, of course, there's no the rule of law in large parts of this country

2795

is completely absent.

2796

It's an illusion and government, it's said often begins as a protection racket.

2801

And when the government doesn't do its job of, you know, being a credible protection

2804

racket, you have competing protection rackets coming in, which may or may not, you know,

2809

divide along lines of ethnicity or caste or identity or whatever.

2813

So the first fundamental function that a lot of these criminal groups do is that, listen,

2818

there is no law and order here and I am the law and order.

2821

And this is something again, you point out with a bunch of concrete examples in your

2825

book, whether it's Mohammed Shah Shah Bouddina, other people where people often say about

2829

them that, look, OK, you know, he might have all these criminal activities through his

2833

name, but he looks after us.

2835

You know, these are all of the things that he does for us.

2837

And when they list them out, you realize that, you know, this is a gap created by the absence

2842

of the state.

2843

The state can't provide all of this, whether it's little things like conflict resolution

2847

or whether it's basic communities.

2848

These are guys coming and saying, OK, I'll take care of all of you.

2852

So it's not just a gunda becoming the dada, but taking the place of the state in a sense

2857

and therefore getting that respect from the community that this is a guy who does everything

2861

and therefore they can win the election and make the additional rents that there are.

2864

Yeah.

2865

And I think there's a variety of ways that they can do this.

2867

So I talk about that in the book.

2868

So, you know, the one thing is sort of intervening in the administration and distribution of

2873

welfare benefits, right?

2874

You are denied a BPL card, the BDO, Block Development Officer, and your locality is

2880

not paying attention.

2882

I contact my politician.

2883

He threatens to, you know, knock a couple heads together and all of a sudden I get my

2888

BPL card.

2888

So there's something around kind of welfare at administration.

2892

Law and order security is another one, right?

2894

In many places, you go to a police house and you are saying, look, I've been a victim

2899

of a crime and they just, you know, if you're not the right profile, then you won't get

2904

an FIR filed.

2905

But again, that's where someone who can throw their weight around to make that work done,

2910

get that work done as a benefit.

2912

Ep 114： Crime in Indian Politics | The Seen and the Unseen