Robbing Peter to pay banks by T. N. Ninan in the Business Standard, 13 Feb.
Meet the Robin Hood of Science by Simon Oxenham on bigthink, 12 Feb.
The diplomat and the killer by Raymond Bonner in The Atlantic, 11 Feb.
Fixing enterprise plumbing by Manish Sabharwal in the Indian Express, 10 Feb.
Debt deja vu by Susan Thomas in the Indian Express, 10 Feb.
NPS is a good product that lives in a bad market by Monika Halan in Mint, 10 Feb. Also see this video with Ashish Aggarwal from 1 February, from the NIFPMF channel.
A discussion on net neutrality, featuring Pavan Duggal, T.V. Ramachandran, Raman Jit Singh Chima, Smriti Parsheera, on the `Big Picture' show on Rajya Sabha TV.
The chips are down for Moore's Law by M. Mitchell Waldrop, in Nature, 9 Feb.
Is Modi Turning Policy Clock Back to Pre-1991 State Control Era? by Abheek Barman in thequint.com, 9 Feb.
Saturday, February 13, 2016
Wednesday, February 10, 2016
TRAI's move on net neutrality
by Iravati Damle, Mayank Mishra, Smriti Parsheera, Sumant Prashant, Ajay Shah.
On Monday, the Telecom Regulatory Authority of India (TRAI) released a regulation and associated explanatory memorandum prohibiting discriminatory tariff for data services. This has elicited interest and responses from all over the world. We watched the Facebook stock price curiously over that period:
On 4th and 5th (Thursday and Friday), there were rumours in the Indian press about what TRAI was about to do. After that, when the US market opened, they may have had some impact. On Monday, the US market opened after the TRAI regulation had been released. Overall, in this period, the Nasdaq index dropped by 6% while Facebook dropped by 12%. Perhaps some of this was caused by the TRAI action.
The TRAI regulation was preceded by an extensive consultation process initiated by TRAI in December 2015, where it posed the following question: Should telecommunication service providers (TSPs) be permitted to charge consumers for data based on the content that they access?
One group, led mainly by TSPs, favoured differential pricing on the grounds that it would increase Internet penetration, encourage investments in infrastructure and allow for the development of innovative products. The supporters of net neutrality disagreed. They argued that content-based discrimination would vitiate the basic principles of the Internet, lead to discriminatory practices and hamper competition and innovation among content providers. TRAI ultimately chose to answer its question in the negative, supporting its regulations with an explanatory note that shows the process and rationale for its decision.
The topic of network neutrality has captured the Indian public discourse for the past several months. Network neutrality is the principle of equal treatment of data packets moving across the Internet. This touches on three core aspects of how TSPs should conduct their business:
The current regulations speak only to the third issue of price related discrimination, putting an effective end to the following types of practices:
The larger issue of how India will deal with the other core components of net neutrality still remains open.
The regulation prohibits TSPs providing both wired and wireless services from (i) offering differential pricing to consumers, based on the type of content being accessed; and (ii) entering into agreements that have a similar effect. TRAI's rationale for moving in this direction rests on a detailed explanation of the basic architecture of the Internet, which is grounded in the idea of openness. Besides this, the explanatory memorandum also speaks about the market failures of information asymmetry and negative externalities, which created a need for regulatory intervention.
The prohibitions are subject to two sets of exclusions. First, TSPs are permitted to have differential pricing in closed communication networks - where the data is not transmitted over the Internet. This could include local intranet services and products like Internet Protocol Television (IPTV). The law however guards against potential misuse of this provision by saying that TRAI will keep a watch on practices that use the exception to evade the discriminatory pricing prohibition. Second, a reduced tariff can be charged in case of emergency services, subject to reporting to TRAI within seven days. For instance, the Chennai floods saw the instant mobilisation of applications targeted specifically for relief and rescue work. Such initiatives would not be hampered by the regulation.
The restrictions also do not cover differential pricing that may be charged independent of the content being accessed. To take an example, Aircel offers a limited period of free capped data on purchase of certain mobile devices. Within those limits, the user can access any available content on the Internet. This is not a violation of discriminatory pricing, as defined by TRAI.
The heart of the new regulations lies in what TRAI has labelled as "the need to preserve the unique architecture of the Internet". This is in line with TRAI's mandate to promote the orderly growth of the sector (i.e. Internet services). Our analysis of the impact on key stakeholders is as follows.
Internet users: The regulations uphold the user's right to choose from among multiple sources of information on the Internet, free from the white noise of discounted offerings. This means that users will have to continue paying for the data that they use while retaining the full freedom to choose the websites and applications that they access.
Some may argue that the regulations potentially harm consumers by slowing down the process of digital inclusion and denying users access to free services. As highlighted above, the restrictions pertain specifically to the use of price discrimination to create "walled gardens" within the Internet. Other schemes that may provide free access to the Internet as a whole will continue to be allowed.
TSPs: TSPs will have to terminate existing arrangements that allow them or their content partners to subsidise access to specific content. They will also have to discontinue schemes that offer content-specific discounted rates. Another important impact will be felt in cases where a TSP is also a content provider - it will not be allowed to leverage its position as a TSP to promote its own content for free.
It is important to recognise that the value of the Internet will grow as more and more people become part of it, a process that is already taking place even without discriminatory pricing. This will continue to translate into economic benefits for TSPs. Their grouse may however be on the denial of the windfall profits that could result through discriminatory practices.
TSPs will have to then compete in the tough commoditised game of producing bandwidth at ever lower prices.
Content providers: The regulations ensure that the Internet will continue to offer a level playing field for all content providers. There will be no entry barriers for small content creators. This will foster greater innovation and competition.
Those that had already entered into private arrangements with TSPs will of course have to alter their plans to bring them in line with TRAI's regulations. Paying the TSP will not be an element of business strategy.
Many people from the world of business are used to unlimited complexity in business contracts. Hindustan Lever has all kinds of innovative contracts with distributors, retailers, etc. By analogy, it is felt that the world of telecom should be similarly unencumbered. However, the revolutionary achievements of Unix and the Internet, from the late 1960s onwards, are rooted in a particular philosophy and design strategy, of openness. We must recognise the value of this philosophy as a universal multilateral disarmament treaty, which ensures cooperation in some respects, and channels competition in others. Gentleman's agreements have given hygiene in the past. However, the commercial pressures of today's technology world do not give adequate guarantees about the future. Net neutrality law uses the coercive power of the State to protect this design philosophy.
TRAI's differential pricing regulations place India alongside countries like Chile, Netherlands and Slovenia that have also taken a clear stand against differential pricing (or zero-rating in particular). The interesting difference however is the fact that those countries did so within the framework of their net neutrality laws. Others like United States and the new regulations in the European Union have also taken a stand on net neutrality but have decided to consider zero-rating on a case-by-case basis. By ruling on the issue of differential pricing without waiting for a broader net neutrality law, TRAI has in effect won the last battle first, within powers under the TRAI Act, 1997.
The policy analysis will now turn to practices like blocking and throttling. It would make sense to think of deeper amendments to Parliamentary law which address net neutrality in a more complete way.
On Monday, the Telecom Regulatory Authority of India (TRAI) released a regulation and associated explanatory memorandum prohibiting discriminatory tariff for data services. This has elicited interest and responses from all over the world. We watched the Facebook stock price curiously over that period:
 |
| Facebook stock price vs. the Nasdaq index |
The TRAI regulation was preceded by an extensive consultation process initiated by TRAI in December 2015, where it posed the following question: Should telecommunication service providers (TSPs) be permitted to charge consumers for data based on the content that they access?
One group, led mainly by TSPs, favoured differential pricing on the grounds that it would increase Internet penetration, encourage investments in infrastructure and allow for the development of innovative products. The supporters of net neutrality disagreed. They argued that content-based discrimination would vitiate the basic principles of the Internet, lead to discriminatory practices and hamper competition and innovation among content providers. TRAI ultimately chose to answer its question in the negative, supporting its regulations with an explanatory note that shows the process and rationale for its decision.
Placing it in context
The topic of network neutrality has captured the Indian public discourse for the past several months. Network neutrality is the principle of equal treatment of data packets moving across the Internet. This touches on three core aspects of how TSPs should conduct their business:
- Access: No authority to allow/block access to any content.
- Speed: No throttling or increasing speeds to access particular content.
- Pricing: No paid prioritisation. No content-based pricing.
The current regulations speak only to the third issue of price related discrimination, putting an effective end to the following types of practices:
- Zero rating - Access to specific content without counting it towards a user's data charges (e.g. Free Basics)
- Sponsored data - Content provider bears the cost of access (e.g. Airtel Zero)
- Content-specific packs - User pays for data but based on type of content (e.g. Special Facebook and WhatsApp packs)
The larger issue of how India will deal with the other core components of net neutrality still remains open.
A summary of the regulations
The regulation prohibits TSPs providing both wired and wireless services from (i) offering differential pricing to consumers, based on the type of content being accessed; and (ii) entering into agreements that have a similar effect. TRAI's rationale for moving in this direction rests on a detailed explanation of the basic architecture of the Internet, which is grounded in the idea of openness. Besides this, the explanatory memorandum also speaks about the market failures of information asymmetry and negative externalities, which created a need for regulatory intervention.
The prohibitions are subject to two sets of exclusions. First, TSPs are permitted to have differential pricing in closed communication networks - where the data is not transmitted over the Internet. This could include local intranet services and products like Internet Protocol Television (IPTV). The law however guards against potential misuse of this provision by saying that TRAI will keep a watch on practices that use the exception to evade the discriminatory pricing prohibition. Second, a reduced tariff can be charged in case of emergency services, subject to reporting to TRAI within seven days. For instance, the Chennai floods saw the instant mobilisation of applications targeted specifically for relief and rescue work. Such initiatives would not be hampered by the regulation.
The restrictions also do not cover differential pricing that may be charged independent of the content being accessed. To take an example, Aircel offers a limited period of free capped data on purchase of certain mobile devices. Within those limits, the user can access any available content on the Internet. This is not a violation of discriminatory pricing, as defined by TRAI.
Impact on the Internet and its stakeholders
The heart of the new regulations lies in what TRAI has labelled as "the need to preserve the unique architecture of the Internet". This is in line with TRAI's mandate to promote the orderly growth of the sector (i.e. Internet services). Our analysis of the impact on key stakeholders is as follows.
Internet users: The regulations uphold the user's right to choose from among multiple sources of information on the Internet, free from the white noise of discounted offerings. This means that users will have to continue paying for the data that they use while retaining the full freedom to choose the websites and applications that they access.
Some may argue that the regulations potentially harm consumers by slowing down the process of digital inclusion and denying users access to free services. As highlighted above, the restrictions pertain specifically to the use of price discrimination to create "walled gardens" within the Internet. Other schemes that may provide free access to the Internet as a whole will continue to be allowed.
TSPs: TSPs will have to terminate existing arrangements that allow them or their content partners to subsidise access to specific content. They will also have to discontinue schemes that offer content-specific discounted rates. Another important impact will be felt in cases where a TSP is also a content provider - it will not be allowed to leverage its position as a TSP to promote its own content for free.
It is important to recognise that the value of the Internet will grow as more and more people become part of it, a process that is already taking place even without discriminatory pricing. This will continue to translate into economic benefits for TSPs. Their grouse may however be on the denial of the windfall profits that could result through discriminatory practices.
TSPs will have to then compete in the tough commoditised game of producing bandwidth at ever lower prices.
Content providers: The regulations ensure that the Internet will continue to offer a level playing field for all content providers. There will be no entry barriers for small content creators. This will foster greater innovation and competition.
Those that had already entered into private arrangements with TSPs will of course have to alter their plans to bring them in line with TRAI's regulations. Paying the TSP will not be an element of business strategy.
Conclusion
Many people from the world of business are used to unlimited complexity in business contracts. Hindustan Lever has all kinds of innovative contracts with distributors, retailers, etc. By analogy, it is felt that the world of telecom should be similarly unencumbered. However, the revolutionary achievements of Unix and the Internet, from the late 1960s onwards, are rooted in a particular philosophy and design strategy, of openness. We must recognise the value of this philosophy as a universal multilateral disarmament treaty, which ensures cooperation in some respects, and channels competition in others. Gentleman's agreements have given hygiene in the past. However, the commercial pressures of today's technology world do not give adequate guarantees about the future. Net neutrality law uses the coercive power of the State to protect this design philosophy.
TRAI's differential pricing regulations place India alongside countries like Chile, Netherlands and Slovenia that have also taken a clear stand against differential pricing (or zero-rating in particular). The interesting difference however is the fact that those countries did so within the framework of their net neutrality laws. Others like United States and the new regulations in the European Union have also taken a stand on net neutrality but have decided to consider zero-rating on a case-by-case basis. By ruling on the issue of differential pricing without waiting for a broader net neutrality law, TRAI has in effect won the last battle first, within powers under the TRAI Act, 1997.
The policy analysis will now turn to practices like blocking and throttling. It would make sense to think of deeper amendments to Parliamentary law which address net neutrality in a more complete way.
Monday, February 08, 2016
Transforming the operational efficiency of tribunals and courts
by Pratik Datta.
Almost two decades ago in L. Chandra Kumar v. Union of India (1997), the Supreme Court had lamented that Indian tribunals function inefficiently since there is no authority in charge of supervising and fulfilling their administrative requirements. The Court had gone on to suggest that until a wholly independent agency for administration of all such tribunals is set up, it is desirable that all such tribunals should be under a single nodal Ministry. Finally, on January 18, 2016, a Constitution Bench of the Supreme Court in Madras Bar Association v. Union of India reportedly directed the Central Government to consider setting up a nodal body or agency for managing all tribunals across all Ministries.
In spite of pending tribunal reforms, Indian policy makers are heavily relying on tribunals to achieve the policy objective. For instance, the Insolvency and Bankruptcy Code, 2015 (IBC) recently introduced in the Lok Sabha envisages an efficient Adjudicating Authority which must dispose of matters within hard deadlines. The entire IBC is subject to this condition precedent. However, given the dismal performance of Indian tribunals, there are legitimate doubts as to how the DRTs and NCLTs will be able to achieve the ambition set out in IBC.
India needs to urgently reform its tribunal system. The Supreme Court's recent direction is a good starting point. This post explains the institutional reforms that would be needed to rachet up the performance of Indian tribunals.
Institutions are crucial to the development of a nation. Backward nations have poorer institutions. They may try to develop and yet consistently fail to improve their institutions. One usual reason for this is that these countries often try to adopt forms of other functional states and organizations which camouflages a persistent lack of function. This is the case with Indian judicial institutions. There is a general agreement in India on the desirable front-end features needed for tribunals (independence, efficiency, accessability, transparency, user-friendliness). These are visible features of any Western judicial institution and have been co-opted into the Indian context through legal transplant (by statute and case-laws). However, the back-end institutional systems supporting these front-end features in the West are neither readily visible to an outsider nor always possible to adopt by legal transplant (especially by case-laws). Therefore, there is an acute lack of awareness in India of what back-end institutional support systems are actually necessary to sustain these front-end features.
Every judicial institution has judicial as well as administrative functions. In most advanced common law jurisdictions, the administrative functions are hived off into a separate agency with a corporate structure. This agency can take advantage of economies of scale and provide standardised administrative support services across courts and tribunals. Additionally, judges are freed from administrative burden and can fully focus on core judicial work. This simple yet critical institutional reform has enabled these countries to enhance the performance of their judiciary.
UK has HMCTS which provides administrative support to its courts and tribunals. Canada has a similar agency set up under the Court Administration Service Act 2002; Australia has a similar agency set up under the Court Services Victoria Act 2014; US has a similar agency set up under the Administrative Office Act of 1939.
In contrast, India does not have a similar agency for managing its courts and tribunals. Each tribunal has its own registry. They are administered by their respective sponsoring Ministries. Consequently, there is no standarisation of services across tribunals of different Ministries. Economies of scale are completely lost. In this overall flawed institutional design, blindly setting up more "fast-track" tribunals will not improve justice delivery. Instead, India should adopt the international best practice and set up a Tribunal Services Agency (TSA) to properly manage all the existing tribunals across different Ministries.
This idea is however not completely new in India. It has been discussed in rudimentary forms by the Law Commission in 1988 which suggested setting up of a National Judicial Centre. In 1997, the Supreme Court in L. Chandra Kumar (1997) suggested that until a wholly independent agency for administration of all such tribunals is set up, it is desirable that all such tribunals should be under a single nodal Ministry. Again in 2015, the FSAT Task Force led by Justice N.K. Sodhi (Chairman) and Mr. Darius Khambata (Vice-Chairman) also suggested incorporating a company to provide administrative services to tribunals in financial sector. And finally, on January 18, 2016, a Constitution Bench of the Supreme Court in Madras Bar Association v. Union of India reportedly directed the Central Government to consider the possibilities of setting up a nodal body or agency for managing all tribunals across all Ministries.
Recently, the Law Minister himself recognised concerns that tribunals are not working satisfatorily. However, the Central Government is yet to come up with a concrete plan on tribunal reforms.
In a recent Working Paper released by IGIDR, I argue that Indian policymakers should seriously consider setting up a TSA to support Indian tribunals including the ones under IBC. The detailed organisation design is also discussed along with board structure and financial arrangements.
The author is a researcher at the National Institute for Public Finance and Policy.
The author thanks Mehtab Hans and Mayank Mishra for useful discussions.
Almost two decades ago in L. Chandra Kumar v. Union of India (1997), the Supreme Court had lamented that Indian tribunals function inefficiently since there is no authority in charge of supervising and fulfilling their administrative requirements. The Court had gone on to suggest that until a wholly independent agency for administration of all such tribunals is set up, it is desirable that all such tribunals should be under a single nodal Ministry. Finally, on January 18, 2016, a Constitution Bench of the Supreme Court in Madras Bar Association v. Union of India reportedly directed the Central Government to consider setting up a nodal body or agency for managing all tribunals across all Ministries.
In spite of pending tribunal reforms, Indian policy makers are heavily relying on tribunals to achieve the policy objective. For instance, the Insolvency and Bankruptcy Code, 2015 (IBC) recently introduced in the Lok Sabha envisages an efficient Adjudicating Authority which must dispose of matters within hard deadlines. The entire IBC is subject to this condition precedent. However, given the dismal performance of Indian tribunals, there are legitimate doubts as to how the DRTs and NCLTs will be able to achieve the ambition set out in IBC.
India needs to urgently reform its tribunal system. The Supreme Court's recent direction is a good starting point. This post explains the institutional reforms that would be needed to rachet up the performance of Indian tribunals.
Back-end institutions
Institutions are crucial to the development of a nation. Backward nations have poorer institutions. They may try to develop and yet consistently fail to improve their institutions. One usual reason for this is that these countries often try to adopt forms of other functional states and organizations which camouflages a persistent lack of function. This is the case with Indian judicial institutions. There is a general agreement in India on the desirable front-end features needed for tribunals (independence, efficiency, accessability, transparency, user-friendliness). These are visible features of any Western judicial institution and have been co-opted into the Indian context through legal transplant (by statute and case-laws). However, the back-end institutional systems supporting these front-end features in the West are neither readily visible to an outsider nor always possible to adopt by legal transplant (especially by case-laws). Therefore, there is an acute lack of awareness in India of what back-end institutional support systems are actually necessary to sustain these front-end features.
The key idea
Every judicial institution has judicial as well as administrative functions. In most advanced common law jurisdictions, the administrative functions are hived off into a separate agency with a corporate structure. This agency can take advantage of economies of scale and provide standardised administrative support services across courts and tribunals. Additionally, judges are freed from administrative burden and can fully focus on core judicial work. This simple yet critical institutional reform has enabled these countries to enhance the performance of their judiciary.
International best practice
UK has HMCTS which provides administrative support to its courts and tribunals. Canada has a similar agency set up under the Court Administration Service Act 2002; Australia has a similar agency set up under the Court Services Victoria Act 2014; US has a similar agency set up under the Administrative Office Act of 1939.
What are we doing in India?
In contrast, India does not have a similar agency for managing its courts and tribunals. Each tribunal has its own registry. They are administered by their respective sponsoring Ministries. Consequently, there is no standarisation of services across tribunals of different Ministries. Economies of scale are completely lost. In this overall flawed institutional design, blindly setting up more "fast-track" tribunals will not improve justice delivery. Instead, India should adopt the international best practice and set up a Tribunal Services Agency (TSA) to properly manage all the existing tribunals across different Ministries.
This idea is however not completely new in India. It has been discussed in rudimentary forms by the Law Commission in 1988 which suggested setting up of a National Judicial Centre. In 1997, the Supreme Court in L. Chandra Kumar (1997) suggested that until a wholly independent agency for administration of all such tribunals is set up, it is desirable that all such tribunals should be under a single nodal Ministry. Again in 2015, the FSAT Task Force led by Justice N.K. Sodhi (Chairman) and Mr. Darius Khambata (Vice-Chairman) also suggested incorporating a company to provide administrative services to tribunals in financial sector. And finally, on January 18, 2016, a Constitution Bench of the Supreme Court in Madras Bar Association v. Union of India reportedly directed the Central Government to consider the possibilities of setting up a nodal body or agency for managing all tribunals across all Ministries.
Recently, the Law Minister himself recognised concerns that tribunals are not working satisfatorily. However, the Central Government is yet to come up with a concrete plan on tribunal reforms.
Conclusion
In a recent Working Paper released by IGIDR, I argue that Indian policymakers should seriously consider setting up a TSA to support Indian tribunals including the ones under IBC. The detailed organisation design is also discussed along with board structure and financial arrangements.
The author is a researcher at the National Institute for Public Finance and Policy.
Acknowledgement
The author thanks Mehtab Hans and Mayank Mishra for useful discussions.
Interesting readings
Areas of weakness in the thinking of financial traders by Ajay Shah, Business Standard, 8 February.
As China's economy unravels, Beijing's attempts at damage control are growing increasingly desperate by Heather Timmons, qz.com, 4 February.
Stealing White: How a corporate spy swiped plans for DuPont’s billion-dollar color formula by Del Quentin Wilber in Bloomberg Businessweek, 4 February.
Is $3T in reserves enough? by Christopher Balding on Bloomberg.
Let the rupee slide by Ila Patnaik, Indian Express, 3 February.
How India Pierced Facebook's Free Internet Program by Lauren Smily, backchannel.com, 1 February.
As China's economy unravels, Beijing's attempts at damage control are growing increasingly desperate by Heather Timmons, qz.com, 4 February.
Stealing White: How a corporate spy swiped plans for DuPont’s billion-dollar color formula by Del Quentin Wilber in Bloomberg Businessweek, 4 February.
Is $3T in reserves enough? by Christopher Balding on Bloomberg.
Let the rupee slide by Ila Patnaik, Indian Express, 3 February.
How India Pierced Facebook's Free Internet Program by Lauren Smily, backchannel.com, 1 February.
Saturday, February 06, 2016
Lecture series on the Public Economics of Health Policy in Developing Countries
Jeff Hammer will deliver five lectures at NIPFP in the coming week. All are welcome.
Recessions uncover what auditors do not
On 14 December 2008, I was nervously looking around at the world and wrote a blog post Goodbye great moderation, hello financial fraud? Almost on cue, we got the Satyam scandal: 21 December, 24 December, and then 7 January. We also got a few other problems in India which (I think) surfaced owing to the Great Recession : NSEL, a rash of ponzi schemes, Sahara, Saradha.
In China, unprecedented times are bringing forth revelations on an unprecedented scale [link, link]. Some of the rackets that are described in China appear quite familiar to us in India, but the magnitudes seen there are astonishingly large. We had such problems in developed markets also -- Madoff and MF Global.
One part of addressing this problem is the familiar machinery of the Indian Financial Code (IFC) version 1.1. As an example, see this analysis of ponzi schemes. As an IFC quality law is not found in either China or India, we have a rash of such problems in both countries.
An important subset of financial crime is about plain criminal law. While the main track of financial policy has been along the Indian Financial Code, we need to develop a work program on improvements of the criminal justice system also. Put together, these will create an enforcement machinery that will generate deterrence against big financial scandals.
Watching China unfold in recent weeks, I wonder if there's a general proposition of the following nature. Recessions will uncover what auditors could not, but under conditions of low institutional quality, this will happen on a bigger scale. Conversely, when institutional quality is low, business and finance will be hampered at all times by low trust. But in good times, when it's easier for the crooks to keep things under wraps, fewer scandals will burst into the public consciousness, and trust will go up. Procyclicality of trust may be heightened in places with low institutional quality.
In China, unprecedented times are bringing forth revelations on an unprecedented scale [link, link]. Some of the rackets that are described in China appear quite familiar to us in India, but the magnitudes seen there are astonishingly large. We had such problems in developed markets also -- Madoff and MF Global.
Institutional reform: Consumer protection
One part of addressing this problem is the familiar machinery of the Indian Financial Code (IFC) version 1.1. As an example, see this analysis of ponzi schemes. As an IFC quality law is not found in either China or India, we have a rash of such problems in both countries.
Institutional reform: Criminal justice system
An important subset of financial crime is about plain criminal law. While the main track of financial policy has been along the Indian Financial Code, we need to develop a work program on improvements of the criminal justice system also. Put together, these will create an enforcement machinery that will generate deterrence against big financial scandals.
Procyclicality of trust?
Watching China unfold in recent weeks, I wonder if there's a general proposition of the following nature. Recessions will uncover what auditors could not, but under conditions of low institutional quality, this will happen on a bigger scale. Conversely, when institutional quality is low, business and finance will be hampered at all times by low trust. But in good times, when it's easier for the crooks to keep things under wraps, fewer scandals will burst into the public consciousness, and trust will go up. Procyclicality of trust may be heightened in places with low institutional quality.
Monday, February 01, 2016
Interesting readings
`The EU is on the verge of collapse' -- An interview with George Soros by Gregor Peter Schmitz in the New York Review of Books, 11 February.
"This Is Much Larger Than Subprime" - Here Are The Legendary Hedge Funds Fighting The Chinese Central Bank by Tyler Durden on ZeroHedge, 31 January 2016.
To really counter terrorism by Manvendra Singh in the Indian Express, 30 January.
Narendra Modi is losing India's market liberals by Sadanand Dhume in the Wall Street Journal, 28 January.
Pains of a young republic by Somasekhar Sundaresan in the Mumbai Mirror, 28 January.
Christopher Balding on proposals for capital controls in China, 28 January.
What a normal startup actually needs by Sumanth Raghavendra, Qz.com, 27 January.
The market's troubling message by Ashoka Mody, Bloomberg, 27 January. Also see a video of his talk of 25 January.
China: Surviving the camps by Zha Jianying, the New York Review of Books, 26 January.
How will China influence us? by Ajay Shah, Business Standard, 25 January.
PBoC in a quandary over capital controls by Tom Mitchell, Financial Times, 25 January.
`My personal vendetta': An interview with Hong Kong publisher Bao Pu by Ian Johnson in the New York Review of Books, 22 January.
Highway for tigers by Padmaparna Ghosh, Mint, 19 January.
Be tight-fisted by Ila Patnaik, Indian Express, 18 January.
Cory Doctorow in the Guardian on India's net neutrality question, 15 January.
The dragnet by Russell Brandom, on TheVerge, 13 January.
How Ukraine weaned itself off Russian gas by Leonid Bershidsky on the Bloomberg, 12 January.
The mother of all currency defences by Ajay Shah, Business Standard, 11 January.
A better bankruptcy regulator by Pratik Datta and Rajeswari Sengupta, Business Standard, 9 January.
Wilderness and economics by Thomas Power and George Wuerthner, Counterpunch, 8 January.
Hiring without signals, David Henderson, EconLog, 7 January.
The amazing maize by Surinder Sud, Business Standard, 4 January.
The big sleep by Julia Medew, the Sydney Morning Herald.
"This Is Much Larger Than Subprime" - Here Are The Legendary Hedge Funds Fighting The Chinese Central Bank by Tyler Durden on ZeroHedge, 31 January 2016.
To really counter terrorism by Manvendra Singh in the Indian Express, 30 January.
Narendra Modi is losing India's market liberals by Sadanand Dhume in the Wall Street Journal, 28 January.
Pains of a young republic by Somasekhar Sundaresan in the Mumbai Mirror, 28 January.
Christopher Balding on proposals for capital controls in China, 28 January.
What a normal startup actually needs by Sumanth Raghavendra, Qz.com, 27 January.
The market's troubling message by Ashoka Mody, Bloomberg, 27 January. Also see a video of his talk of 25 January.
China: Surviving the camps by Zha Jianying, the New York Review of Books, 26 January.
How will China influence us? by Ajay Shah, Business Standard, 25 January.
PBoC in a quandary over capital controls by Tom Mitchell, Financial Times, 25 January.
`My personal vendetta': An interview with Hong Kong publisher Bao Pu by Ian Johnson in the New York Review of Books, 22 January.
Highway for tigers by Padmaparna Ghosh, Mint, 19 January.
Be tight-fisted by Ila Patnaik, Indian Express, 18 January.
Cory Doctorow in the Guardian on India's net neutrality question, 15 January.
The dragnet by Russell Brandom, on TheVerge, 13 January.
How Ukraine weaned itself off Russian gas by Leonid Bershidsky on the Bloomberg, 12 January.
The mother of all currency defences by Ajay Shah, Business Standard, 11 January.
A better bankruptcy regulator by Pratik Datta and Rajeswari Sengupta, Business Standard, 9 January.
Wilderness and economics by Thomas Power and George Wuerthner, Counterpunch, 8 January.
Hiring without signals, David Henderson, EconLog, 7 January.
The amazing maize by Surinder Sud, Business Standard, 4 January.
The big sleep by Julia Medew, the Sydney Morning Herald.
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