Markets in everything: using Coasean bargains to resolve culture conflicts

by Samrudha Surana and Bhargavi Zaveri-Shah.

Introduction

In pluralistic societies with multiple, and often conflicting, cultural, religious, or ethical beliefs, disputes between groups with conflicting norms are highly likely. Take the case of a diverse society such as India. Hindus often complain about the Muslim cleric's call to prayer on loudspeakers, non-Hindus complain about the noise levels during celebratory festivals, Jains complain about the eating habits of other communities, and so on. Often, such conflicts get escalated to courts in the form of disputes, to the government in the form of lobbying for bans, or worse, as law and order problems. Pluralistic societies almost always face the following question: how can differences between conflicting norms be reconciled without resorting to State coercion or violence? In this article, we argue that voluntary commercial transactions between parties with conflicting norms are a powerful mechanism to resolve such conflicts.

Drawing from Ronald Coase's work on externalities and property rights, we argue that the principles underlying Coasean bargaining are not limited to economic contexts, but are also broadly applicable to social and cultural disputes. By internalizing the costs associated with conflicting norms, Coasean bargains enable parties to reach mutually beneficial agreements through voluntary exchanges. We illustrate this through a recent real-world example from India, where voluntary market transactions helped members of two religious communities reconcile their conflicting religious norms. A key policy implication of our argument is that it is imperative for policymakers to minimize the transaction costs for such voluntary transactions.

Coasean bargains in theory

Conflicts arise when one person's actions impose costs on another, creating competing interests that must be balanced. The economist, Ronald Coase, illustrated this through an example of cattle owners and farmers (Coase, 1960). Straying cattle may destroy a neighbouring farmer's crops, benefiting the cattle owner but harming the farmer. Preventing the cattle from straying, however, would impose a cost on the cattle owner. The problem is clear: allowing the cattle to stray increases cattle supply at the expense of crops, while restricting their movement favours crops at the expense of cattle. This is a problem of a reciprocal nature. Resolving such conflicts requires determining the value of what is gained versus what is sacrificed. In such cases, using a stream of case law from the US courts, Coase argued that instead of the State determining the hierarchy of who should prevail, one of the parties could internalize the costs arising to the other, from the exercise by the former of her property right. A Coasean bargain offers a way for individuals to resolve such conflicts through voluntary agreements that align their interests and minimize the costs of the conflict. For instance, a farmer might pay a cattle owner to install fencing, or the cattle owner might compensate the farmer for crop damage. When multiple actors are involved-such as several cattle owners and farmers-the feasibility of Coasean bargains depends on the transaction costs. While high transaction costs may prevent agreements in some cases, parties able to negotiate successfully can still improve their situations by reaching mutually beneficial agreements.

While Coase advocated this framework for the allocation of conflicting property rights, in the next few paragraphs, we demonstrate that the framework has implications for enforcing conflicting values as well.

A Coasean bargain in action

Last year, on the occasion of Eid Al Adha (Bakri-Eid) a festival widely celebrated in India and several countries with a significant Muslim population, a group of people were reported to have raised some money and purchased some goats from an Old Delhi market to rescue them from ritualistic slaughter. This incident was seen as an act of religious intolerance on the part of the rescuers. The undertone of these arguments was that the animal rescue on Eid Al Adha was driven by the rescuers' religious intolerance for Muslims and not genuine compassion towards animals. The rescuers profess Jainism, a religion founded on the value of ahimsa (non-violence towards all life forms). The Jain community is perceived to be populated by rich Jain merchants, who generally vote for the BJP. In a society so deeply divided on religion as India is today, this context creates suspicion for the rescuers' motivations behind this act.

The act of rescuing animals through voluntary transactions between the rescuers and the animal vendors is an example of a Coasean bargain that enabled the Jain and Muslim communities to resolve conflicting values without impinging on the rights of the other community. In this incident, the Jain purchasers perceived a harm from the sale of goats for slaughter . But, to stop the sale of goats would have harmed the seller. If the seller refused to sell to the Jains, the cost of slaughtering goats would have been internalized by the seller in the form of forgone payments from the Jains. In this case, the Jains internalized the costs that would have arisen from the slaughter of the goats purchased by them. Both the buyers and the sellers benefitted from the transaction. The sellers of the animals got value for their goats. The buyers got 'value' for their money in the sense that they managed to use the money to honour a value that they hold. As a Muslim man interviewed by the news reporter said in response to this incident, "It's their religion, and if saving animals (like goats) is part of it, we don't mind. Let everyone practise what brings them peace."

Coasean bargains work where the property rights of the people are more or less clearly defined. For example, consider a hypothetical, but realistic, scenario in a diverse urban neighbourhood where a temple's ceremonies or a mosque's call to prayer disturbs the residents of that neighbourhood. Under a Coasean bargaining framework, a standard example similar to this scenario is that of a firm installing a noise-creating windmill affecting the adjoining property owners' enjoyment of their property. In a world where the law confers property rights on people, a negotiation can start. The firm would offer the people some money in exchange for putting up with the noise, and people sensitive to the noise will perhaps use that money to install noise proof windows. These bargains are possible because nuisance has been defined as a tort under common law. That is, the law entitles people to enjoy their property without disturbance. Similarly, in our hypothetical scenario, in a diverse neighbourhood, the group affected by the noise levels might offer to fund the temple's or mosque's acquisition of a quieter sound system to reduce the noise impact. Alternatively, the temple or mosque may make a similar offer to the neighbourhood residents allowing them to enjoy their property without interruption. In the absence of such clarity on property rights, the scope for arriving at Coasean bargains is extremely limited. Similarly, in instances where the property rights are contested, such as whether the land on which a mosque stands belongs to the trust which runs the mosque, Coasean bargains may not offer a solution. In such cases, it would generally fall upon the courts to define the property right.

Coasean bargains versus coercion

A key benefit of Coasean bargains is that they help build a culture of religious tolerance, as compared to the use of State institutions to address religious conflicts. Even in countries whose constitutions allow their citizens the freedom to practice and propagate a religion of their choice, the State machinery is often used to perpetuate religious leanings. For example, in India, almost every year, like clockwork, several petitions are filed at one court or another in or around the festival of Eid-Al-Adha to restrict ritualistic animal slaughter.

Asking the State and courts to resolve these conflicts is problematic as it empowers them to impose a hierarchy of values on the society at large. For example, in the case illustrated above, a court order restricting the rights of Muslims to slaughter animals would have impliedly placed a higher value on the ritualistic notion of slaughter than the Jains' religious notion of non-violence towards animals. Since courts are designed to enforce rights and interpret laws, they are ill-suited to resolve conflicting values or norms that do not contradict the law. For example, consider the following conflicting values:

1. animal welfare activists rescuing goats from ritualistic slaughter
2. climate activists purchasing ceramic Ganesha idols from the vendors of such idols and disposing them to pre-empt them from being submerged in the ocean
3. climate activists purchasing firecrackers during Diwali and disposing of them to pre-empt noise and air pollution

It is hard for any central institution to explain why one of these values should take precedence over the other, and then impose such preference ordering over the rest of society. In a voluntary transaction, on the other hand, the question of addressing the hierarchy of values is immaterial, since the transaction is based on the subjective value that each party places on their beliefs. A Coasean bargain allows the people practising these conflicting values to order their preferences without forcing them to do so. Further, empowering the State creates opportunities for rent seeking. In electoral democracies, this risks allowing a majoritarian bias to be played out in such conflict resolution, and exacerbates the mistrust of people in the State and the courts.

Voluntary transactions that allow the transacting parties to uphold norms that are important to them are similarly preferable to the common counterfactual of violence, aggression and the exclusion of practices that don't meet one's religious or philosophical leanings.

Conclusion

The Coasean framework underscores the power of voluntary agreements to internalize costs and balance competing economic interests between persons. We extend this intuition to the resolution of conflicting religious and cultural norms, which are likely to exist in any pluralistic society. The incident of Jain members purchasing goats during Eid Al Adha demonstrates how Coasean bargaining through market mechanisms can resolve religious conflicts without state intervention. This case demonstrates that voluntary market transactions, motivated by individual preferences, can yield broader societal benefits by reducing friction between conflicting norms. In a country like India that is ridden with cow protection laws, state sponsored beef bans and religious violence, the volition of this transaction has tremendous significance.

While rooted in a specific cultural context, the insights derived from this example resonate beyond India. The Coasean approach underscores how the market enables each party to achieve their goals while respecting others' freedoms, creating positive societal benefits as an unintended consequence. Many seemingly intractable conflicts between religious communities might find resolution not through legal battles or state intervention, but through Coasean bargaining, where mutual respect and cooperation emerge naturally from the market process, even when religious tolerance itself is not the participants' primary goal.

Finally, as Coase emphasized, the feasibility of these transactions is dependent on the transaction costs. In environments with high transaction costs, such transactions will be fewer, if at all. The goal of the policymaker, therefore, should be to lower the transaction costs to make Coasean bargains between extremely unlikely transacting parties work.

Reference

Coase, Ronald (1960), "The Problem of Social Cost", Journal of Law and Economics, 3 (Oct., 1960).

The authors thank Ajay Shah and three anonymous referees for their inputs.

Bringing gender equality in the Hindu Succession Act: An overdue reform

by Devendra Damle and Ajay Shah.

One element of the gender problem in India is the Hindu Succession Act, 1956 (HSA). This law governs intestate succession for Hindus, Buddhists, Jains and Sikhs (i.e. 80% of Indian citizens), and discriminates against women. Under the rules governing the devolution of property, the relatives of a woman's husband have a stronger claim to her property than her parents and siblings. This is not true of the property belonging to a man. This unequal treatment is inconsistent with equal treatment by the state as envisioned in Articles 14 and 15(1) of the Constitution of India.

This question has just come back into prominence. In an ongoing case — Kamal Anant Khopkar vs Union of India [WP(C) 1517/2018] — the Supreme Court of India issued an order on 7th December 2021 directing the Solicitor General to provide the Union Government's view on these discriminatory provisions (See: here). A brief by the Amicus Curiae — Meenakshi Arora — highlighting the discriminatory provisions prompted the Supreme Court to take this action. The bench noted that this discrimination has remained in the statute books for a long time. The Court also noted that a judicial and/or legislative intervention is necessary to remedy it.

The discriminatory provisions in the HSA have profoundly impacted many Hindu women. Some examples help us understand the unfairness in play:

1. Consider an ongoing case in the High Court of Punjab and Haryana (See: here). One Devina Bhardwaj and her husband Chetan Bhardwaj jointly purchased a home in Gurgaon in 2014. Devina bore most of the expense. Both contracted COVID-19 in early 2021. Chetan died intestate in April 2021. As a result, his property devolved to Devina and his parents in equal parts. Shortly after that, Devina also died intestate. Devina's mother-in-law sought to gain access to Devina and Chetan's assets (estimated to be worth INR 2.7 crore), a significant portion of which were Devina's self-acquired property. The concerned revenue department officials declared her the sole-legal heir to Devina's assets. This is in line with the scheme of devolution under the HSA.
   Devina's mother has filed a petition in the High Court of Punjab and Haryana claiming her right to Devina's share of assets, and challenging the constitutional validity of the relevant provision of the HSA. The High Court has issued a notice to the Union Government seeking its reply. (See: here)

2. The Supreme Court dealt with a similar issue in the landmark case Om Prakash v. Radhacharan [(2009) 15 SCC 66]. In this case, one Narayani Devi's husband died shortly after their marriage. Her in-laws banished her from the matrimonial home. She returned to her parents, who supported her and provided her with an education. She went on to amass a significant amount of property of her own, and died childless and intestate. Her mother and her late husband's nephews filed competing claims over her self-acquired property. The matter eventually reached the Supreme Court. The Supreme Court, relying on a plain reading of the HSA, granted all of Narayani's' property to her late husband's nephews, while her mother received nothing. The story would have been very different if Narayani had been a man.

In an NIPFP working paper, we describe how devolution schemes under the HSA differ for men and women. We describe how courts have interpreted these provisions, and their validity under Articles 14 and 15(1) of the Constitution of India. We describe the previous attempts at reform and where they have fallen short. We propose an amendment to the HSA to make it more gender-equitable. Several other authors have pointed out the disparity between how a man's and woman's property is treated under the HSA, and the consequences of this discrimination (See: here and here).

Devolution of property under HSA

The HSA prescribes different rules of devolution for property belonging to men and women. The devolution scheme for a man is governed by Section 8 of the HSA. It states that Class-I heirs — his mother, wife, and lineal descendants — have the first claim to his property. Class-II heirs — his father, siblings, lineal descendants of his siblings, and the siblings of his parents — have a claim if there are no surviving Class-I heirs. The Schedule to the Act contains a detailed list of heirs in each class and sub-class. All property belonging to the man devolves as per this scheme, and it largely keeps all the man's property within his natal family.

The devolution scheme for a woman's property is different. Section 15(2) applies to any property the woman inherited from her husband, her husband's family and her parents. Under Section 15(2)(a), if a widow dies childless, any property she inherited from her husband or his family returns to the heirs of the husband. 'Heirs of the husband' refers to the list of heirs given in Section 8. Section 15(1) gives a general devolution scheme, which applies to all other properties. Under Section 15(1), a woman's husband and children have the first claim to her property. The heirs of her husband are next in line, followed by her parents, followed by other heirs of her parents.

Under Section 15(1), if a widow dies childless, the heirs of the husband have a stronger claim than her parents and siblings over all her property that she did not inherit from her parents. This includes all self-acquired property, gifts, bequests through wills, and property inherited from siblings and other relatives. There are no reciprocal provisions in the devolution scheme for a male deceased's property. There is no scenario where a woman's family has a claim over the husband's property.

Constitutional challenge to Section 15 of the HSA

Article 14 of the Constitution of India guarantees all persons equal treatment under the law and Article 15(1) explicitly prohibits the state from discriminating between citizens solely based on religion, race, caste, sex, or place of birth. This means the state cannot make laws that treat citizens differently solely based on the aforementioned distinctions, except in specific circumstances. It appears clear that the provisions of the HSA — which are part of Hindu personal law — discriminate between men and women, but does this violate Article 14 and 15(1)?

In Mamta Dinesh Vakil v. Bansi S. Wadhwa [LNIND 2012 BOM 748] the Bombay High Court termed this unequal treatment unconstitutional. It concluded that the discrimination in HSA is solely based on sex and cannot plausibly be said to serve any other rational purpose. The Court, however, referred the question of constitutionality to a larger bench, which has yet to be constituted. While the question of constitutionality may not be settled, judgments such as Om Prakash v. Radhacharan highlight the fact that discrimination under HSA is, in the least, extremely unfair to women. Specifically, Hindu widows with no surviving children.

India's international commitments

The discrimination under HSA falls afoul of India's commitments under the United Nations Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW). India became a signatory to the CEDAW in 1980, and the Parliament ratified it in 1993. Removing gender-based discrimination in property-related legislation is one of the core requirements of the CEDAW.

The Supreme Court has, in multiple cases, ruled that the legislature, administration and judiciary must give due regard to India's international commitments under treaties such as the CEDAW. In C Masilamani Mudaliar & Ors v Idol of Sri Swaminathaswami Thirukoil & Ors [(1996) 8 SCC 525], the Supreme Court ruled that the obligations under CEDAW to eliminate gender-based discrimination in legislation are binding on the government. The Supreme Court has made similar rulings in several other cases, such as Madhu Kishwar & Ors. v State of Bihar & Ors. [(1996) 5 SCC 125], and Githa Hariharan and Ors. v Reserve Bank of India and Ors. (MANU/SC/0117/1999).

Past attempts at reform

There have been some attempts at reform in the past, but so far, they have been piecemeal, limited in their scope, and unsuccessful. The Law Commission of India, in their 207th Report (2008) and their Consultation Paper on Family Law (2018), recognised the issue of disparity in the treatment of men's and women's self-acquired property and proposed amendments. However, instead of instituting a common devolution scheme, they proposed adding another subsection to Section 15 to govern the devolution of a woman's self-acquired property.

The Law Commission's proposal has three issues. First, it does not define self-acquired property. Second, it retains Section 15(2)(b), which requires the property that a woman has inherited from her husband to be passed to the husband's heirs if she dies childless. Third, it ignores the fact that the heirs of the husband will be preferred over the woman's natal family if she has inherited the property in question from relatives other than her parents, such as her siblings or grand-parents, since it will continue to be governed by Section 15(1).

Two private member's bills — the first introduced by Anurag Singh Thakur in 2013 and the second introduced by Dushyant Chautala in 2015 — also sought to resolve this issue. However, both these proposed amendments suffered from the same problems as the proposal of the Law Commission. What is necessary is a comprehensive reform of the devolution scheme in the HSA.

Better examples before us

There are two existing Indian succession laws that do far better than the HSA in terms of gender-equality. Devolution schemes in the Indian Succession Act, 1925 (ISA) and the Goa Succession, Special Notaries and Inventory Proceeding Act, 2012 (GSSNIP) are gender-neutral. ISA applies to Christians and Parsis, and GSSNIP applies to all persons domiciled in Goa. The British Colonial Government enacted the ISA in 1925. The progenitor of the GSSNIP — the Portuguese Civil Code — was enacted in Goa in 1870. The ISA is still on the statute books, and the GSSNIP replaced the Portuguese Civil Code in Goa in 2018.

Conclusion

The provisions of the HSA discriminate against Hindu women by prescribing different rules for the devolution of property held by men and women. These provisions unfairly prioritise the husband's family over the woman's own family, even when the woman has acquired the property in question through her skill or effort. The legislation is a product of an era when it was inconceivable for Indian women to own and acquire property. However, these biases continue to be perpetrated upon Hindu women in India today. This discrimination is probably ultra vires of Articles 14 and 15 of the Constitution of India. It violates India's commitments under the CEDAW. It is unfortunate that the Parliament has allowed this discrimination to persist despite knowing of the existence of more equitable laws such as the GSSNIP and ISA in our own country.

The Supreme Court's notice to the Union Government is an indication of India's evolving jurisprudence on questions of gender-equity. This is an opportunity for the Court and the Parliament to, once and for all, eliminate discrimination in a law that affects a majority of Indian women.

References

1. Gender discrimination in devolution of property under Hindu Succession Act, 1956 (NIPFP Working Paper No 305), by Devendra Damle, Siddharth Srivastava, Tushar Anand, Viraj Joshi and Vishal Trehan, May 2020.
2. Equal treatment for women on inheritance, by Ajay Shah, in Business Standard, 2020.
3. A law that thwarts justice, by Prabha Sridevan, in The Hindu, 2011.
4. Childless Hindu widow's death leads to flawed property succession: Supreme Court, in The Times of India, 2021.
5. HC seeks Centre's reply on petition challenging validity of section 15 of Hindu Succession Act alleging gender discrimination, in LegitEye, Aug 2021.
6. Proposal to amend Section 15 of the Hindu Succession Act, 1956 in case a female dies intestate leaving her self acquired property with no heirs (Report No 207), by Law Commission of India, 2008.
7. Consultation Paper on Family Law, by Law Commission of India, 2018.
8. Manju Narayan Nathan v. Union of India and another [CWP No. 14305 of 2021 (O&M)], High Court of Punjab and Haryana, August 2021.

Devendra Damle is researcher at the National Institute of Public Finance and Policy. Ajay Shah is researcher at xKDR Forum and Jindal Global University.

Stockholm Syndrome in Indian Organizational Culture

by Tapishnu Samanta and Manish Kumar Singh.

Stockholm syndrome is a state of the mind where a captive develops a psychological alliance towards his or her captors to the extent of defending them (Smith, 2009; Fabrique et al 2007). The term was coined in 1973 by Swedish psychiatrist Nils Bejerot during the Kreditbanken Bank robbery investigation in Stockholm, where four employees, taken hostages, defended their captors and refused to testify against them (Bejerot 1974). At the heart of Stockholm syndrome lies a person who implicitly or explicitly exerts power, control and influence over another person without him noticing that his behaviour is almost to the degree of blind loyalty. This label has been used to define circumstances of incest victims (Carver 2007), prisoners of war (Hunter 1988), political prisoners (Wardlaw 1982), suicidal terrorists (Speckhard 2005), victims of home violence (Walker 2016), rape trauma (Burgess & Holmstrom 1974), sex trafficking (Canada Department of Justice 2012), prostitutes (Karan 2018; Kathleen 1984; Farley 2003), and cases of elder abuse (Scaletta 2006). Several authors have also used Stockholm syndrome to define the relationship between the state and the society, where the citizens tend to be loyal despite the several instances of the country trying to exploit their fundamental human rights (Hudson 2014; Chu 1999).

This concept has been extended to organisational culture, also known as the Corporate Stockholm syndrome where employees of a company start to identify with, and are exceedingly loyal to, an employer who is manifestly hostile to their self-interest (Adorjan et al 2012; Ullrich 2014; Logan 2018). This has become an area of interest in health and labour economics because of the severe health ramifications. India has been consistently ranked among the worst countries for workers' rights (see the ITUC Global Rights Index). A fragmented society, massive unorganized sector, and weak state capacity can be a breeding ground for labour force exploitation (Harriss-White & Gooptu 2009). In this article, we present evidence of Stockholm syndrome in Indian corporate culture from a small pilot study. This study should be seen as a precursor to more rigourous research that may be conducted in the future.

Data and methodology

In-depth interviews were conducted with ten white-collar employees with at least one year of work experience. They were first introduced to questions such as ideal working hours, proper working conditions, and ethics of overtime work. They unanimously agreed that eight hours of working shift should be suitable in an organization and that all overtime duties must be sanctioned only for extreme situations and compensated. They were then asked personal questions related to their corporate experience.

When asked about their working hours, they worked from Monday to Friday for a minimum of nine hours and were frequently burdened with overtime duties. They were occasionally verbally and mentally abused by their managers, especially when there were tight deadlines and tremendous work pressure. Most of them had even stayed up the entire night on a few occasions. It was quite evident from the in-depth interviews that their managers mistreated all the subjects through verbal abuse, long working hours, overtime, and negligence towards their mental and emotional wellbeing. However, they also agreed that they were happy with their work-life as it offered excellent learning opportunity and displayed great loyalty towards their organizations. All the candidates accepted that not being compensated for overtime work made them annoyed and occasionally frustrated, but argued that those conditions were necessary for the success of the organization.

A detailed survey questionnaire was developed based on this data for further qualitative analysis. A pilot survey was conducted with a sample representing the top 5% of the Indian white-collar employees in terms of salary. Fifty-one respondents with at least six months of work experience and employed with organizations in India participated in the survey. The respondents consisted of 76% male and 24% female participants. 86% of the participants represented the service sector, while the remaining 14% represented the manufacturing sector. The group represented 90% of people in the age group of 21-30 years, 6% in the age group of 31-40 years, and 4% in the age group of 41-50 years. Culturally, the participants were from diverse languages and different Tier-1 cities.

The first part of the survey contained personal questions mostly aimed to identify the perceived level of abuse that the employees face in their respective organizations. The corporate abuse was classified into six categories, viz. verbal abuse, financial abuse, mental abuse, physical abuse, sexual abuse, and abuse of work-life balance. Each of these abuses was further classified into five levels viz. not at all, slightly, somewhat, moderately, and extremely. A Likert scale was used in the survey to capture the levels of each of the reported abuses. The second part of the survey asked whether they would recommend their organizations to their friends and relatives.

Level and prevalence of abuse in Indian corporates

Table 1 shows the level and extent of abuse prevalent in Indian organizations based on the responses. Participants who responded "extremely", "moderately", "somewhat" or "slightly" for any of the six abuse categories were cosidered victims of corporate abuse in that category. Over 50% of the respondents (27 out of 51) reported financial and mental abuse in their organization. Further, around 40% of the participants (20 out of 51) reported verbal abuse. While less than 10% reported physical abuse, none of the employees reported sexual abuse in their organizations. It must be noted that the companies represented by the respondents are all corporate-level jobs, and yet physical abuse was reported by the employees.

Table 1: Perceived degree of corporate abuses by the participants in their respective organizations

	Verbal abuse	Financial abuse	Mental abuse	Physical abuse	Abuse on Work-life balance
Extremely	2	4	1	0	6
Moderately	4	1	3	0	8
Somewhat	3	8	11	3	13
Slightly	11	14	12	1	13
Not at all	31	24	24	47	11
Grand Total	51	51	51	51	51

Moreover, the level of financial and mental abuse reported by the employees is also quite high, with 4 out of the 51 participants reporting extreme financial abuse. Since the numbers are self reported, this may be due to fault in the appraisal system, career stagnation in the current organization, or the participants overrating themselves as high-performing employees. The recorded abuse on work-life balance is also exceptionally high, with around 78% of the employees reporting so.

Do employees stay longer with the abusive employers?

One would believe that the amount of time an employee spends with an employer is inversely proportional to the level of abuse, which means that if an individual is treated well in an organization, he continues to work loyally in the firm and vice versa.

Figure 1 shows the relation between the work experiences of the abused employees with their latest employer against the degree of various abuses. Except for verbal abuse, in all other cases, we found a positive relationship between the level of abuse and the time spent with the employer. The positive slopes observed here suggest that employees stay longer with an abusive employer and the magnitude of the correlation varies from 0.09 for financial abuse to 0.35 for work-life balance abuse, as shown in Table 2.

Figure 1: Graphs showing the level of abuse in different categories versus work experience with the latest organization for abused employees.

Table 2: Correlation between the level of abuse in different categories against work experience with last/current organization for abused employees

	Verbal abuse degree	Financial abuse degree	Mental abuse degree	Work-life balance abuse degree
Work experience with last/current employer	-0.0102	0.0903	0.1132	0.3460

Based on Table 2, we can also infer the abuse categories which go undetected in an individual's decision to leave a particular job. Correlation analysis suggests the following order: Verbal abuse > Financial abuse > Mental abuse > Abuse on work-life balance. Near zero correlations (-0.01) between verbal abuse and work experience suggest people are almost indifferent to verbal abuse. Financial and mental abuse show small positive correlations (0.09 and 0.11 respectively) suggesting the presence of mild Stockholm syndrome. People are aware of it but instead of acting upon it, people are actually staying a little longer with the job. Abuse of work-life balance stands out with a positive correlation of 0.35. This also suggests how mental abuse and abuse of work-life balance might get undetected. A possibility that better employees leave the organization early and those who stay longer find it difficult to get placed in better jobs elsewhere may also partially explain this result.

Do abused employees recommend their employer?

Here we analyze if there exists any pattern between recommendations made by employees to their relatives or friends to join the organization and the different types of abuse that they face in their jobs. The results obtained from the responses are shown in Table 3. Note that we have assumed that the participants who responded "Maybe" are considering recommending their organizations to others because any employee who is tormented by the abuse in his organization would respond with a clear "No". Hence, "Maybe" as a response has been recognized as an affirmative or a "Yes."

Table 3: Relationship between the report of abuses in organizations by the participants and their recommendation to join their organizations

Recommendation to Join	Verbal abuse		Financial abuse		Mental abuse		Physical abuse		Abuse on Work-life balance
	Yes	No	Yes	No	Yes	No	Yes	No	Yes	No
	20	31	27	24	27	24	4	47	40	11
Yes (in %)	90.00	87.10	92.59	83.33	92.59	83.33	100.00	87.23	85.00	100.00
No (in %)	10.00	12.90	7.41	16.67	7.41	16.67	0.00	12.77	15.00	0.00

The table highlights that under the verbal abuse category, we have 20 people who underwent verbal abuse while 31 said there was none. Of the 20 people who reported verbal abuse, 90% would recommend relatives and friends to join the firm. Similarly, under the financial abuse category, we have 27 people who reported financial abuse while 24 said there was none. Of these 27 people who said yes to financial abuse, 92.59% would recommend relatives and friends to join the firm.

Table 3 suggests that most of the employees (over 90% on average) recommend the current organization to their friends and family members. Employees reporting abuse in their organizations are also supporting their employers to friends and families, even more than the non-abused individuals. The fact that a higher proportion of the abused individuals are recommending their organization to friends and family (except for the abuse on work-life balance) than the non-abused ones is even more surprising. For example, in the case of financial abuse, 92.59% of individuals who feel financially abused at work would recommend the organization to their friends and family, while only 83.33% of non-abused individuals would recommend it further. Similarly, 100% of the employees reporting physical abuse in their organization would recommend their employers in comparison to 87.23% of those who haven't expressed physical abuse. Although, the only exception to this pattern is observed in abuse on work-life balance, yet as much as 85% abused individuals have supported their employers further. This gives us a clear indication that despite being exploited by their employers, the majority of employees are recommending their firms to others.

Conclusion

We provide suggestive evidence that corporate Stockholm syndrome is quite prevalent in Indian organizational culture. Searching for a rationale, for most people, due to the immense value that work holds, the threat of losing one's job is a powerful motivation to comply at the beginning. However, with time the employees get emotionally attached to the workplace and develop loyalty towards it. Camaraderie and moral suasion - the view that it was the organization that offered them a monthly salary and the little sacrifice they made was for the good of the organization - helps them justify the abuse. They also believe that it was inevitable while working in a project and was sometimes necessary for the success of the project. This deep loyalty leads them to rationalize the poor treatment of the employer as a necessity for the good of the organization. Some of the employees may even develop a belief that some form of abuse is a norm across the industry irrespective of the company they work for.

It must also be noted that the respondents represent the upper segments of Indian employees in terms of salary, who have not only argumentative power but also the capability of switching jobs. We are of the opinion that if this is prevalent at the very top, then significant concerns would lie in the unorganized industrial sectors. With that being said, since people suffering from corporate Stockholm syndrome most often do not realize about the plight they are already in, no easy solution can be found.

Some employees have created websites/blogs with the provision for others to anonymously rate and review their organizations, and have become immensely popular in a quick time (see glassdoor.com, greatplacetowork.in). If more and more firms become concerned about their social image, online content related to employee concerns may likely cause a considerable impact.

References

Adorjan, M., Christensen, T., Kelly, B. and Pawluch, D., Stockholm syndrome as vernacular resource,  The Sociological Quarterly, 53(3), 454-474, 2012.

Bejerot, N., The six day war in Stockholm, New Scientist, 61(886), 486-487, 1974.

Burgess, A.W. and Holmstrom, L.L., Rape trauma syndrome. American Journal of Psychiatry,131(9), 981-986, 1974.

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The authors are researchers at IIT Delhi. We are thankful to two anonymous referees.

The Diwali effect in Delhi air quality

by Dhananjay Ghei, Arjun Gupta and Renuka Sane

As Diwali approaches, we have learned to worry about air quality. Over the last few years, several studies have noted the increase in pollution levels during the period of Diwali owing to increase in commercial activity and firework displays. However, as we show in our previous article, there is considerable variation in PM 2.5 levels in Delhi in terms of location/time/month:

1. Time Effect: The effect of diwali is not uniform throughout the day and is more prevelant at particular time of the day than other times. We also need to adjust for the confounding effect of time: pollution levels are high during the night and low during the day.
2. Location Effect: Several areas of Delhi are severly polluted throughout the time, whereas others see large variations in their pollution levels. All these reasons make it difficult to attribute the entire increase in PM2.5 on Diwali.
3. Month Effect: The day of Diwali Festival varies in the Gregorian Calendar between the 17th October and 15th November every year. Existing pollution levels are already high when compared to the annual average. This is a confounding effect.

It is possible that the bad air that we see in Delhi at the time of Diwali is just the bad air quality in winter, and is not causally impacted upon by Diwali. In this article, we attempt to quantify the increase in the PM 2.5 levels during the Diwali period. Does Diwali have an impact upon air quality? If so, by how much?

Issues in research design

The opportunity to identify a Diwali effect comes from the fact that Diwali is a `moving holiday' which takes place on a different day of each year. If this were not the case, it would be strongly correlated with changing climate.

Our ability to analyse these questions is greatly hampered by the lack of data. As of today, the data only runs from 1/2013 to 10/2016.

The air pollution caused by fireworks includes many contaminants. The data that we are studying covers only pm2.5.

Pollution levels on Diwali

The data used for the analysis comes from the US Consulate based in Chanakyapuri and the Central Pollution Control Board for 4 locations (R K Puram, Punjabi Bagh, Mandir Marg, Anand Vihar). The data consists of hourly PM 2.5 levels across the five locations from January 2013 to October 2016. We winsorise the data at 1% on both ends to remove the extreme tail values.

The effect of Diwali on pollution levels

We first estimate the effect of Diwali on daily data using an event study. We aggregate the hourly concentration of PM2.5, at each location, to arrive at the daily numbers. The day of the Lakshmi Puja is taken as the event day. Therefore, we get 3 events for each location. Next, we calculate the percentage change in PM2.5 concentration levels by differencing the logarithm of PM2.5 values. These are then re-indexed to show the cumulative change over a 20 day window.

Event study showing the change in PM2.5 around Diwali date (in days)

The solid line represents the average cumulative percentage change in PM2.5 values during the window, whereas the dashed line represents the confidence intervals calculated using the bootstrapped standard errors. We see that pollution levels start increasing one day before Diwali, and increase till two days after Diwali. It is also interesting to note that the increase in the pollution levels is significant during the two days after Diwali. This can be attributed to the fact that Diwali celebrations begin only on the night of Diwali, thereby leading to a significant increase the next day, as well as Diwali being celebrated over an extended period of time.

We now come at the same set of questions using a regression.

Contribution of Diwali on PM2.5: Regression analysis

Since Diwali is celebrated over a number of days we also define the following models:

1. Diwali=t: Diwali
2. Diwali={t-1:t+1}: 3 Days (day before Diwali, Diwali, day after Diwali)
3. Diwali={t-1:t+2}: 4 Days (preceding day to two days after Diwali)

The model is as follows:

\[ PM2.5_{it} = \alpha + \beta_1*Diwali_{t}+ \beta_2*Diwali_{t}*l_{i} + m_t + h_t + l_i+\epsilon_{it} \]

where, $i$ is location, and $t$ is time. Here, PM 2.5 is the hourly measured levels of the pollutant. The first model takes Diwali to be only the date of Diwali, second model defines the Diwali days from one day before to one day after and the third model considers Diwali from the preceding day to two days after Diwali. In addition, we have month ($m_t$), location ($l_i$), and hour ($h_t$) fixed effects. The base for the location interaction term is Anand Vihar. Robust standard errors are used for our analysis throughout.

	Dependent variable:
	Hourly PM2.5 Concentration
	Diwali=t	Diwali={t-1:t+1}	Diwali={t-1:t+2}
	(1)	(2)	(3)
Diwali	-3.720	98.687	134.709
	t = -0.177	t = 8.496***	t = 13.181***
Chanakyapuri*Diwali	17.270	-75.878	-87.035
	t = 0.638	t = -5.100***	t = -6.692***
Mandir Marg*Diwali	73.078	-67.943	-66.844
	t = 2.606***	t = -4.450***	t = -4.979***
Punjabi Bagh*Diwali	65.630	-49.033	-52.254
	t = 2.374**	t = -3.254***	t = -3.945***
R K Puram*Diwali	63.348	-54.228	-67.094
	t = 2.291**	t = -3.589***	t = -5.055***
Month FE	Yes	Yes	Yes
Location FE	Yes	Yes	Yes
Hour FE	Yes	Yes	Yes
Observations	118,847	118,847	118,847
R2	0.264	0.264	0.266
Adjusted R2	0.264	0.264	0.266
F Statistic (df = 39; 118803)	1,091.020***	1,094.274***	1,103.673***

The first model (Column 1) shows that the baseline effect (i.e. at Anand Vihar) is not statistically different from non-Diwali days. For locations, other than Chanakyapuri, there is a differential effect on Diwali relative to Anand Vihar on Diwali. For instance, Diwali adds on an average 69.35 (73.07-3.72) µg/m³ PM2.5 particulate matter in air at Mandir Marg relative to Anand Vihar.

When we consider the second (Column 2) and third (Column 3) specifications, there is a statistically significant effect in Anand Vihar. The average particulate matter is 99 µg/m³ higher when we consider a two day Diwali, and 135 µg/m³ when we consider a three day Diwali period. While this may not seem much, given the already degraded air quality during these months, Diwali makes the pollution level reach alarming levels (>400, the monthly average in October November is around 340) which can have severe impacts on the health of people.

The Diwali effect is lower in other other locations relative to Anand Vihar. Thus, we see, that on the main day of Diwali, Anand Vihar is not too different from other days, while other locations have more pollutants relative to Anand Vihar. However, once we take into account 1-2 days after Diwali, we see that Anand Vihar is the most polluted location, and other locations have lower pollutants relative to Anand Vihar.

Conclusion

Very little is known, at present, about air quality and Diwali. Using the admittedly weak data resources, we have begun analysing this question here.

To the extent that these results are persuasive, they could help individuals plan strategies to avoid being in Delhi on these days. There is also a case for a Pigouvian tax on fireworks, in order to overcome the externality.

Previous work on Diwali, which helps us see other dimensions of Diwali, includes: Seasonal adjustment with Indian data: how big are the gains and how to do it by Rudrani Bhattacharya, Radhika Pandey, Ila Patnaik, Ajay Shah, and IEDs in Diwali and Toxic chemicals in Holi by Ajay Shah.

The changing role of women in India

The three modernisations

The trajectory of a country is about three modernisations: social, political and economic. Social modernisation is about establishing freedom and rights of individuals. Political modernisation is about achieving democracy, where there is rule of law, where State power is dispersed and restricted, where elections generate contestability. Economic modernisation is about achieving a high growth modern market economy, about a government that gets away from expropriation and central planning to a government that is focused on solving market failures.

All three modernisations interact in complex ways and fuel each other. As an example, Milton Friedman's `Capitalism and Freedom' hypothesis is the idea that political modernisation fuels economic modernisation and vice versa. This is a well established idea in the discourse. I find it also interesting to think about the other two legs of the stool: the interlinkages between social modernisation and the other two kinds of modernisation.

The role of women

When we think of social modernisation and economic modernisation, the big thing that leaps out is the role of women. A society that does not respect women is under-utilising half its labour force. We would expect to see a causal impact of greater equality of women upon growth.

We in India are sometimes complacent about the role of women in India. India is famous for having women in leadership roles. In a dinner meeting by Larry Summers, I once said that India was world #1 on one measure of the role of women: the fraction of the top 100 financial firms that are headed by women. I once met Andre Beteille, and asked him: When compared with 1947, in what aspect have things in India worked out much different from what you expected. He said: The role of women in the elite. He said that for upper class women in India today, it's better than even Japan, which is otherwise a very advanced country. The daughters of the elite in India have no glass ceiling, which is better than what we see in most places.

On a population scale, however, things are vastly worse. Paramita Ghosh reports, in the Hindustan Times, on a crime victimisation survey of women with scary results. The India Today survey (link, link) shows us that 79.3% of men believe that marital rape is okay. We don't know how many men in India act out on this belief, but the report Why do some men use violence against women and how can we prevent it? by the United Nations, shows us scary facts from some Asian countries that have men who think similarly to what the Indian data is showing. The Supreme Court ruling of yesterday is a reminder of the distance that we have to go on achieving social modernisation.

Things are changing dramatically with the young

With human capital measures like literacy or graduating high school, a person tends to achieve them when young. If a person has not become literate or graduated high school by age 20, things are unlikely to change later on. Hence, the analysis of the cross section in the population is tantamount to looking at the history: what we see for (say) 50 year olds today is a description of what things were like, 30 years ago, for 20-year olds. Age-specific rates are like rings of a tree.

Literacy of the cohort aged 22.5
(Time-series reconstructed from age-specific rates visible in the cross section)

The graph above shows the literacy of the cohort entering the labour force, which I approximate as being the cohort at age 22.5. The blue vertical line stands for today. This is constructed using the cross-section visible in March 2013 from CMIE Consumer Pyramids, a quarterly panel dataset with 150,000 households covering 700,000 individuals. With children, high literacy rates are found early on, and this yields projections for literacy of the age 22.5 cohort in the future.

We see that overall literacy of the cohort entering the workforce has gone up from roughly 70% in 1990, when India began opening the economy, to roughly 90% today and will go up to 100% in the coming 15 years. In addition, there was a big gender gap, which has been significantly reduced and will fully go away.

Let's turn to high school graduation.

High school graduates in the cohort aged 22.5
(Time-series reconstructed from age-specific rates in the cross section)

It seems shocking to think that in 1990, roughly 7% of the cohort starting off into the labour force, at age 22.5, had passed 12th standard. This has gone up dramatically to 20%. Sharp growth is visible into the future when today's 15 year olds become age 22.5, and there is no gender gap with today's 15 year olds.

The third thing that I want to show from household survey data is the ownership of mobile phones.

Age-specific rates of mobile phone ownership

All of us have been hearing about miraculous growth of mobile phones in India for a while, and have become a bit inured to the story. While a lot has happened, however, a lot remains to be done. The black line shows that with males, roughly 75% of the young and 80% of the old have mobile phones. The work is progress lies in taking this up to 100% for everyone. What's striking is the women. The upper red line, for March 2013, shows that 40% of girls have mobile phones, and this decays to 20% at age 45. On a related note, Avjit Ghosh, writing in the Times of India, talks about a paper by Yvonne MacPherson and Sara Chamberlain which finds that only 9% of adult women in Bihar have ever sent an SMS. There is a high rate of change with mobile telephony, in even the short timespan between the latest data (March 2013) and the first data from CMIE (June 2010) which is the lower red line.

Speculation

I feel that in the early decades after independence, we had a progressive elite, which was able to bring up daughters well and we made amazing strides at the top. But social modernisation took place only in the elite. For the bulk of the population, attitudes and indoctrination and levels of violence remained neanderthal.

M. N. Srinivas has emphasised the extent to which the rest of society aspires to catch up with the lifestyle and the values of the elite. In the early years, there was little catch up on the treatment of women: the elite and the proletariat coexisted like oil and water. Perhaps budget constraints came in the way of translating aspirations. Maybe poor households shortchanged daughters on nutrition and education and mobile phones and such like, thus encouraging subservience in daughters. In my opinion, the economic growth of the last 20 years is creating a new wave of households within which daughters are growing up differently. Daughters who have high school education and a mobile phone are going to engage with the world differently. As an example, they are less likely to accept sexual harassment and sexual assault. We may now be at the early stages of something very big.

Economic modernisation has created this phase of social modernisation. The rise of capable women who will not be pushed around will, in turn, fuel economic growth because we are then getting a superior labour force. There is an enormous distance to cover. In my opinion, it will be a story spread over two generations (50 years) starting from 2000, through which we will endup with something satisfactory on the role of women. Economic growth will create opportunities for women and for sensibly bringing up daughters, and the rise of capable women will fuel economic growth.

The convenience of the citizen or the convenience of the government?

Road safety is a problem in India. The authorities are getting push back from the citizenry about the carnage on the roads. What is convenient for them is: to shut down roads.

Finding terrorists is difficult. Terrorists can use open wifi networks or trains. What is convenient for the authorities is to shut down open wifi networks or trains.

Achieving safety in public spaces late in the night is difficult. What is convenient for the authorities is to force all establishments to close down at 10 PM.

In similar fashion, I was disappointed to read Chanpreet Khurana in Mint write about how the Delhi Metro is trying to achieve safety of women: through gender segregation. This is profoundly wrong. Women must have complete flexibility to dress as they like, go where they like, and at any time they like. Anything less than that is a reduction of personal freedom of women. It is the job of the State to achieve extreme levels of safety while never interfering with the freedom of women. Gender segregation is a cop out. It will lead to a worsening of safety of women, by emphasising to the authorities that they actually don't have to figure out how to achieve a sound criminal justice system. The next time a woman gets attacked in a mixed-gender coach, she will be blamed for having been in the wrong place.

The rules of society must be designed to maximise the freedom of citizens. It is only in a police state that a policeman's job is easy. Decisions should not be taken which make life convenient for bureaucrats and politicians. Achieving a capable State is hard work! That is what politicians and bureaucrats must do, as opposed to finding easy ways to dodge the problem. We have to hold their feet in the fire, else they will readily wriggle out using these excuses which are bad for citizens, avoid the problem of building State capacity, and perpetuate an incompetent State. On a related note, see Faulty tradeoffs in security, on this blog.

It is very convenient for bureaucrats to ban things in Indian finance and cut Indian finance off from the world. This reduces their work. Why bother learning about credit default swaps when you can just ban them? Blocking a capable financial system is easier than restructuring regulatory organisations, enacting new laws, recruiting high quality staff, and setting up sound business processes. The strategy of blocking the emergence of a capable Indian financial system is self-serving and convenient; it avoids the difficult work of actually constructing capable financial regulators. As Percy Mistry says, in Indian finance, instead of regulators adapting themselves to the needs of the financial system, we have the financial system distorting itself to fit the needs of the regulators. In an accountable democracy, it must be the State that constantly adapts to achieve freedom for each citizen.

There is a principal-agent problem between citizens and State. The principal wants the agent to serve their goals, i.e. to produce public goods at the lowest possible cost, and to not abuse power by meddling in the lives of citizens. The agent wants to be lazy and inefficient, to steal, and to abuse power. We should be cautious: we should not hear the views of the agent on what the principal should do, and we should not accept solutions that are convenient for the agent such as gender-segregated coaches in Delhi metro.

Competence in policing

David Montgomery, Sari Horwitz and Marc Fisher have a great story in the Washington Post about how the police tracked down the murderers in Boston. Also see Spencer Ackerman in Wired magazine. On a similar theme, look back at the attack at Times Square in New York.

We in India fare dismally on this. Lacking competence in the police, we repeatedly engage in faulty tradeoffs in security, where police either infringe on the freedom of citizens or resort to brutality against innocent `suspects'. Every time the police quickly solve a case, I worry that they merely tortured some plausible sounding suspect.

Law and order is the most important and most basic public good. Dense urban congregations, which are the essence of modern creative capitalism, are only possible with very high levels of safety. The US is priority #1 for the bad guys, and has had two attacks in 12 years, both of which were followed by outstanding investigations. We in India suffer from thousands of attacks, most of which are never solved. This shows the low capabilities of our law enforcement crew.

We in India go wrong at three levels:

• Elections have degenerated into competitive subsidy programs; both politicians and voters have stopped focusing on performance of the government on public goods. Left-oriented intellectuals are complicit in this, with an emphasis on inequality and subsidies rather than on public goods. When voters are not focused on public goods, the accountability through elections does not generate feedback loops in favour of better public goods.
• In this environment, inadequate resources go into public goods, the most important of which is the criminal justice system.
• Within the criminal justice system, there is little accountability, and we are not seeing feedback loops through which the system is constantly reshaped (within existing budget constraints) towards better performance.

The recent wave of outrage on law and order should ideally help set a new course. See Law and order: Going from outrage to action. Mistreating women is not encoded in our culture or our DNA: it is endogenous to the incentives provided by the criminal justice system. The same Indians behave very differently towards women when placed in alternative criminal justice systems in other countries. If enough voters demand performance from politicians for better law and order, we will get a greater focus on it, in terms of:

• More top management time. E.g. how many hours per year does the PM work on law and order in Delhi versus how many hours does he spend on NREGA?
• More money. E.g. how much money do we put into law and order in Delhi versus how much money do we put into NREGA? 
• More and better people. E.g. how do we get the best and brightest civil servants out of relatively unproductive tasks (subsidies) and into the things that matter (public goods)? How do we increase the staff strength of government in public goods, while cutting the size of government on subsidies? How do we make careers in police, courts and jails more attractive, and careers in education, health and welfare programs less interesting?
• More analysis. How do we get more research papers on the criminal justice system, and fewer research papers on development economics?

Measuring social conservatism and social change

The widely reported UNICEF Report Card on Adolescents has survey evidence about persons in the age group 15-19 in India, for 2011. Adolescent boys were asked whether they think that a husband is justified in hitting or beating his wife under certain circumstances, i.e., if his wife burns the food, argues with him, goes out without telling him, neglects the children or refuses sexual relations. The answer: 57% thought it was okay. There were only 8 countries in the sample worse than India: Sierra Leone (57%), Swaziland, Azerbaijan, Uzbekistan, Uganda, Timor-Leste, Solomon Islands and Tuvalu (83%).

This isn't about war of the genders. The women suffer from Stockholm Syndrome: 53% of the girls in that age range agree. I think this is a very interesting litmus test about social conservatism in India. I wonder what the original sources are, and how we might see the variation in this number by income class and location.

Nicholas D. Kristof in the New York Times led me to The better angels of our nature by Steven Pinker (2011), which says:

In 1987 only half of Americans thought it was always wrong for a man to strike his wife with a belt or stick; a decade later 86 percent thought it was always wrong.

This is similar ("is it okay for a man to beat a wife") but also different (in the former case, it is only age 15-19 and it isn't as specific as a belt or stick). Also see Battlefronts.

This makes us see India in new light. From 1987 to 1997, the US got this number down from roughly 50% to roughly 14%. Let's not think in terms of crude historical determinism. This absolutely does not guarantee that the change in India over the coming decade will be similar. But it shows us the scale of social change that could arise over fairly short time-periods.

One of the most fascinating features of recent weeks has been the variety of politicians and religious figures coming out and talking about their social conservatism in the public domain. It will be interesting to see how well these pronouncements pan out with a young electorate. There has always been something odd about the mismatch between youthful India and its octagenarian leadership that peddles. Perhaps recent events will help make voters more skeptical about the present leadership.

Attitudes and beliefs in India

We generally know remarkably little about what the people of India feel and think. Politicians have an interest in emphasising ideological biases. Systematic surveys about attitudes and beliefs are generally not taking place. Under these conditions, I find it useful to take whatever scraps of evidence one can get from efforts rooted outside India which are measuring attitudes and beliefs in India.

One important institution working on these things is the Pew Research Center which runs the `Pew Global Attitudes Project'. They regularly runs surveys in India, and I have blogged about some of these results before.

Some interesting new results were released yesterday. The focus of the study is on gloom in the world economy. With apologies to the authors, I'm going to ignore many elements of that effort, for I found some sub-components which interested me more. Their survey methods seem to be quite good; a sample of 4018 adults spread over a large swathe of India.

Are you better off than you were five years ago?

The basic engine of high growth is delivering: a lot of people feel they are better off than conditions prevalent five years ago. There is a holdout of roughly a quarter of India which says they are worse off.

Can most succeed if they work hard?

Do we have a Calvinist ethos? In the overall average, 67 per cent of India believes that most succeed if they work hard. This is behind the US (which is at 77 per cent) and Pakistan (81 per cent) but ahead of all countries in Europe and also China (45 per cent) and Japan (40 per cent).

The rich are more in favour of this proposition. There are 8 countries where this belief varies strongly by income:

While the overall average is 67 per cent, among the rich we have a much higher number (74 per cent in support). This is next only to the US. This drops off to 64 per cent among the poor. It is interesting that the middle class is what feels the least good about hard work, with 62 per cent. We have a bit more of a Calvinist ethos at the two extremes of the income distribution.

Support for the market economy

Support for the market economy is strong. Four large countries are ahead of India on this score: Brazil, China, Germany, the US. The UK is the same as India on this. Is there support for the market economy in these six countries because the outlook for these countries for the next decade is good, or is it the other way around?

The rich are particularly upbeat when compared with the poor

On an array of questions, the Indian rich are much more optimistic then the poor.

Finally, who's to blame

Those who said that economic conditions were bad were asked an additional question: Who is to blame. The results are unsurprising, for us:

92 per cent of India knows who is at fault: The Indian State. There isn't much anti-finance in India nor is there much anti-US. In places like Brazil, 29 per cent blame finance and in places like Pakistan, 32 per cent blame the US.


Most of us generally expect that mainstream attitudes in India would be quite left-wing, pro-State, anti-market, etc. The evidence does not seem to support these preconceptions.

IEDs in Diwali and Toxic chemicals in Holi

by Ajay Shah.

When I was young, resounding explosions and other fireworks were an integral part of Diwali. It was not possible to conceive of Diwali any other way. If you extrapolated into the future, and envisioned the next doubling of GDP, you'd have forecast that there would be much more than 2x the explosions and other glittering displays, assuming that social mores stayed unchanged.

There was a dark side to such Diwali celebrations: the inevitable trickle of people engaging with explosives who got hurt, extreme discomfort for all forms of life other than humans, and air pollution. Many years ago, it seemed like all these problems were real, but there wasn't any other way. It was hard to conceive of a world where Diwali was celebrated differently.

I used to think there was a common goods problem: Each individual gained utility out of igniting fireworks, despite imposing externalities on other creatures (of various species) in terms of noise or pollution. It isn't easy to get humans to be concerned about externalities imposed upon others.

I have been astonished at how these three messages (accidents, animal rights, pollution) have gone through to the young, and Diwali now involves much less of the fireworks than used to be the case. After we factor in the GDP growth, the change is simply amazing. By rights, such a social transformation should have been very hard. But it happened. I wonder how this happened. (There is some data on this phenomenon at Central Pollution Control Board, but the work is of poor quality and the website is terrible, so it's hard to compare 2002 against 2011).


Fast forward to Holi. Holi seems deeply entrenched, particularly in North India. There is a dark side to Holi celebrations: toxic chemicals, sexual harassment, substance abuse. All these problems are real, but there doesn't seem to be any other way. Unlike the problems of Diwali, two out of these three (toxic chemicals and substance abuse) are about private goods: the individuals who engage in certain practices are the direct losers as a consequence. So there isn't a common goods problem here; this should be easier to solve. But it's hard to conceive of a world where Holi is celebrated differently.

Or should we be so pessimistic? I saw a story on NDTV: Nearly 175 hospitalised for colour poisoning. As information about these problems spreads, will behaviour change? In an ideal world, we should have the public goods of Health/Safety/Environment regulation, ensuring that the dyes used are safe. In an ideal world with high quality police and courts, the sexual harassment and Holiganism will be checked. But it will be many years before India has such governance capacity; at present the main focus of politicians is not upon public goods. For a few decades, the only way forward is for a lot of people to step away from the present social mores. It happened with Diwali; could it happen to Holi?


Could it happen to Ganpati Visarjan in Bombay?