Posted by Aditya Kuvalekar on May 6, 2013
An article by Vijay Kuvalekar (my father), Ex State Information Commissioner, Pune, MH on his experience as an RTI Commissioner, on the use and misuse of RTI in the society.
The article is in Marathi and appeared in a Marathi weekly Sadhana’s 2010 Diwali issue. Sadhana later turned this article itself into a booklet and sold 10,000 copies (if I am not mistaken) of it all across Maharashtra due to its heavy demand.
Posted in General, Government | 1 Comment »
Posted by Aditya Kuvalekar on April 30, 2013
This is what the Times of India reports –
Articulating Indian nuclear policy in this regard for the first time, Shyam Saran, convener of the National Security Advisory Board, said, “India will not be the first to use nuclear weapons, but if it is attacked with such weapons, it would engage in nuclear retaliation which will be massive and designed to inflict unacceptable damage on its adversary. The label on a nuclear weapon used for attacking India, strategic or tactical, is irrelevant from the Indian perspective.” This is significant, because Saran was placing on record India’s official nuclear posture with the full concurrence of the highest levels of nuclear policymakers in New Delhi.
That gets me to talk a bit about some game theory in this context. I will not assume much knowledge about game theory. And I will try to keep the jargon out as much as possible.
One of the first things to do in analyzing this game is going backwards. Now, given that India has declared that its response would be the same irrespective of what kind of nuclear weapon is used – small or large, means that Pakistan, in the event that it decides to use the nuclear weapons, is strictly better off in inflicting maximum damage to India. The reason is simple. No matter what’s the strength of its weapon, the damage in return that it’s going to face is constant. So, it’s only fair to assume that it would be prefer higher damage than lower to India.
Fair enough, so then, we can safely conclude that this statement, if anything, has ensured that if Pakistan ever uses nuclear weapons against India, it will be the biggest possible attack it can. So, in that sense, it seems rather odd that India should have said this.
When would it have been a good statement to make? – To create some uncertainty for Pakistan. What’s the use of uncertainty? We will see that later. But minus uncertainty, this statement can only harm India, as highlighted above.
But then, all this could be a talk in the air. The real question is Will Pakistan ever use nuclear weapons against India? I don’t believe we can answer this question. I also don’t believe that most of those who do answer that question have any real insight about it. Given that the answer to this question is binary, essentially, a random answer is going to be correct with a 50% probability. And that’s a mighty high chance for a guess.
Why do I think that we can’t answer this question? It’s because we know for sure that if Pakistan is as crazy as they sound then they are very likely to attack on slightest of provocation. But what if it’s a fully rational player? That is a player who only maximizes his total benefit and is very shrewd so to say.
Let’s make some very simple and maybe realistic assumptions. Suppose the strength of the two militaries is such that in a concentional war India will have an upper hand. Also, in a nuclear war, due its sheer size, Pakistan cannot wipe India off the map but India can. Lastly, whether crazy or not, the Pakistani state does derive immense pleasure by harming India. So, a fully rational Pakistani state, will not want to go on a conventional war with India. Neither would it want to have a nuclear war with India. But it would want to harm India in some way.
That’s essentially the behaviour that distingushes the crazy Pakistani elements from rational. The crazy ones do want a nuclear conflict with India, for whatever reasons. The only way they can have such a conflict is by being provoked by India.
Now observe how would India respond. Suppose India believes that Pakistan is a rational state. And suppose the rational Pakistan state carries out 26/11. Then, India’s optimal response is to go all-out against Pakistan. But, if India believes that, with some probability, Pakistan is a crazy state. Then, in all likelihood, India’s response is likely to be quite meek, except in one case that will be mentioned below.
Now, let’s go back to Pakistan. Suppose Pakistan is crazy. Then nobody can do anything about it! They will act according to their will. But suppose it is rational. Even then, given India’s response, it’s best for them to pretend to be the crazy guy.
This is a very key point. The crux is, irrespective of whether Pakistan is rational or crazy, the rational Pakistan will act like crazy to cause confusion for India. That way they can also harm India and avoid a stronger response by India. That is why, the rational Pakistan will always involve itself in acts like 26/11 just so that it looks crazy even though it might not be.
Now go back to India. We know that whenever Pakistan claims to be crazy and carries out operations like 26/11 it is quite likely to be the rational Pakistan acting like crazy and is most likely not crazy. But then, what do we do? What’s the outcome of this game?
And here comes the masterful insight in game theory by Ronald Coase. It’s called the Coase Conjecture. (As an interesting trivia, Coase had a Coase theorem and a Coase conjecture. It turned out that the theorem was false but the conjecture was true.) The gist of Coase conjecture is the following –
This was a stunning insight by Coase which has been proved many times in various contexts. In the game like the game between India and Pakistan, that of reputation, the Coase conjecture holds. India’s type is known to be rational. We have openly declared ourselves to be rational. And just apply Coase conjecture to our situation.
The outcome will always be in Pakistan’s favour. It has always been and unless something dramatic happens it will always be. The thing about Coase is that no matter how small is the chance of the other player being crazy, once you have revealed your nature the outcome will always be in the other person’s favour!
It is obvious that India comes across as more rational than Pakistan. So it is very hard for India to pull off being as crazy as Pakistan. But then, here are some states, that I think, can invoke some uncertainty about their position and not lose the game -
Coase conjecture is exactly the reason why India cannot be rational all the time and hope that Pakistan reciprocates. The only way India can hope to match Pakistan in this strategic battle is by acting like it. Changing reputation cannot happen overnight. But it’s when you have the chances to change them that you have to take them. 26/11 was a chance we didn’t take.
Some bit of game theory can be very useful, unless you’re an economist PM singing His Master’s Voice. The future, in that case, is something I shudder to think about.
Posted in Economics, General | 1 Comment »
Posted by Aditya Kuvalekar on February 18, 2013
This post was first published at Center Right India where I will be contributing whenever I get the time.
Once again, I went on a way longer break than I should have. But you know, blogging requires the kind of motivation that I acutely lack. Having said that, I also believe that this concept of picking up seminal economics papers and writing about them is an interesting exercise.
Enough of a preamble. The paper I am going to write about is Can Labour Regulation Hinder Economic Performance? It’s a paper by Besley and Burgess from the LSE.
The first and foremost reason why this should attract the audience that I intend to write for is because it’s a paper with India at the focus. Secondly, it’s a very very policy relevant question. And lastly, given how well-cited this paper is, quite likely even the skeptics would be hard-pressed to counter the conclusions that the paper gives.
Posted in Development, Economics | Tagged: besley, burgess, communist, Economics, employment, labor, poverty, urban | Leave a Comment »
Posted by Aditya Kuvalekar on January 10, 2013
While my enthusiasm is high, I will write more than what I would otherwise during a semester I guess. This topic was suggested by Harsh Gupta (https://twitter.com/hguptapolicy). I take this opportunity to thank him.
I would also like to apologize for a long post. I tried making it shorter but I couldn’t. Please be patient.
We will see a very interesting paper on gun control and homicides. First of all, I am only laying out some empirical evidence related to gun control and crime. I am not taking much of a stand myself. Secondly, unlike statistical discrimination that I wrote about last week, this is a much more complex topic because it involves a lot of legal and ethical aspects to it. So, what we are really going to see in this post (you and I are both going to see as I too read this paper only last week) is whether increase in gun ownership increases homicide rate significantly.
Posted in Uncategorized | 15 Comments »
Posted by Aditya Kuvalekar on January 4, 2013
After a hiatus, I am venturing back into this arena. I am thinking of running a fortnightly or so, series of writing about seminal development and other economics issues related papers from academic literature in as simple language as possible. I will try to keep the jargon out but that invariably also means that, at times, I will have to take the intricacies of the arguments involved in paper. However, I would be more than happy to discuss those in comments. I have never tried doing anything like this before. So, please bear with me if I sound too technical and point it out to me. At the end of the day, if we can have a meaningful conversation and a civil discourse I would consider this venture a great success.
Posted in Uncategorized | Tagged: discrimination, Economics, empirical evidence, knowles, papers, persico, statistical discrimination | 7 Comments »
Posted by Aditya Kuvalekar on June 17, 2012
In my first year in New York, I got a chance to live in one of the most exciting neighbourhoods of Manhattan. So, it’s no wonder that I absolutely fell in love with New York. It is most certainly my favourite city in the world. That said, there’s one huge downside to NY – the rents.
I am supposed to move out of my current accommodation by August and so, my roomie and I, began our quest for a nice, liveable and cheap (utopia) apt in Manhattan. We went to a couple of brokers and before we started any viewings and stuff we signed an agreement form.
Here’s the deal with the agreement form. The basic contents are of the form that the broker is acting solely in my interest and is not an agent of THE LANDLORD. So what he wants to offer me is the best price and his only motive is that. I sign it. He then also tells me about a couple of apartments that are cheaper than the market rate but they’re there because those listings are exclusively with him as THE LANDLORD likes to work with him.
Fair enough. But then, if you think something’s too good to be true then common sense often gets it right. So I asked one of the brokers about THE LANDLORDs. As it turns out, landlords in Manhattan are some wealthy families that basically own like 50-70 or even more than that, buildings around Manhattan.Yes, 50 effing buildings! It was a nasty jar. A few months ago, a friend of mine had told me that the landlord is like a God here. If you write to him thrice then he replies once. My reaction was, “what the eff do these guys think of themselves? Big shit if they own the apartment” As it turns out, I was completely off.
Those people are stinking rich and also influential. The procedure of getting an apartment is after you like it you prepare an application. Yes! A effing application which goes to THE LANDLORD and then he takes a call on whether to accept or reject it. Take that! Hence I have chosen to address them as “THE LANDLORD”.
Now think about it. If one such landlord gets pissed off with the brokerage firm for giving “cheaper than market price” rate to him he will move to another broker. In New York, the rate at which people keep coming and out with all sorts of subletting and stuff happening, the demand for apartments is almost infinite. And supply is not only less but it’s also controlled by a very few people who actually have some sort of an impact on the market.
Given this situation, why on earth would the broker want to act in my interest and not the landlord’s? Is there any incentive whatsoever for him to do so? Isn’t it absolutely obvious?
Posted in General | Leave a Comment »
Posted by Aditya Kuvalekar on April 28, 2012
I am posting after a long time and this is not going to be a terribly interesting post either. The reason for this hiatus, as one might guess, is because grad school is tough! But I don’t want to crib about that right now. I would rather say something positive and nice that I saw today.
Every now and then the Economics dept of NYU arranges a Friday evening “Beer and Eocnomics” where some professor gives a small speech and then people drink, eat, go home and work on problem sets. Today, it was Prof.Andrew Caplin talking about his research and what he wishes to do. It was simply fantastic. He combines a lot of psychology into his mainstream economics research. He has spent a lot of time understanding the housing finance market in the U.S. Econ professors are not known for picking topics of this kind in general. So, this in itself is quite a courageous thing according to me. But on top of that, he had a very interesting thing to say about the theoretical models in economics, data and real world. Firstly, it is well known that theoretical models are abstractions from the reality. However, as he said, the models are very interesting in themselves and although they don’t mimic the real world or rather are quite far from it, one needn’t be radical because they offer quite a few beautiful things such as the methods. But radicalism is rarely interesting. On the contrary, him and many other economists, are doing something else. That is, making small changes in the existing framework by looking at the data and getting closer to the real world. They are gathering more and more data, data that might not seem relevant by the theoretical models but in reality does affect things. The world, is a complex place. The hope is someday, we will be able to predict things in a much better manner than what we have been able to do so far.
The reason why I say this is because I wish to point out the honesty within the profession, the effort to take things to real world and explain. The problem is real world is extremely complex. Economics is not useless. Research, unlike blogging and tweeting, is not a place where people solve problems in five minutes. And that’s actually the beauty of it.
Posted in Economics | 1 Comment »
Posted by Aditya Kuvalekar on January 18, 2012
It is no secret that we are very emotional and sensitive people in India. A mere book is enough for us to set buses and cars on fire. Our sentiments being hurt is all it takes for us to take to streets, stop traffic, cause nuisance, express anger and then go home and sleep. It is this behaviour of us that receives constant flak from the liberals and intellectuals and quite deservedly so I must say. As a society we present a very grim picture about the level of public discourse we can have. That is why, a considerable section of our society has been calling for a serious reform in the norm of freedom of speech that we have in our constitution. Compared to the US or some other liberal countries, we fare very poorly on the freedom that an individual has in speaking up his mind. And as some people say, we require freedom of speech especially to say things that are not pleasing to everyone’s ears. That’s exactly the reason why it must exist.
Enough of preamble. Let’s get down to the point I have in mind. As the title suggests, it’s about the recent turn of events. First, Dr.Subramaniyan Swamy, a man I respect wholeheartedly for more than one reason (getting a publication in Econometrica as a M.Stat student for example) and have no qualms in admitting the same, wrote this in DNA on July 14,2011. It has been removed from the DNA website subsequently. Amongst many controversial things that he wrote, he proposed the following things to wipe out Islamic terrorism -
But still, if any Muslim does so acknowledge his or her Hindu legacy, then we Hindus can accept him or her as a part of the Brihad Hindu Samaj, which is Hindustan. India that is Bharat that is Hindustan is a nation of Hindus and others whose ancestors are Hindus. Even Parsis and Jews in India have Hindu ancestors. Others, who refuse to so acknowledge or those foreigners who become Indian citizens by registration can remain in India, but should not have voting rights (which means they cannot be elected representatives).
Posted in General, Law, Philosophy | Tagged: Dr.Swamy, Ethics, Freedom, Liberty, Mill, Speech, Subramaniyan Swamy | 2 Comments »
Posted by Aditya Kuvalekar on November 18, 2011
A friend posted something related to Indira Gandhi and an airplane hijack in 1978 on Facebook. The post seemed propagandist in nature to be honest. These days there are so many things floating around about the Gandhi family and their crimes that it’s hard to discern between the truth and fiction. Out of curiosity I googled a bit and found a Wikipedia page (Yes, a Wiki page!) that says
December 20, 1978: Two Hindus, Devendra Nath Pandey and Bhola Nath Pandey hijacked Indian Airlines flight IC-410. They demanded the immediate release of Indian National Congress party leader Indira Gandhi who was imprisoned at that time on the charges of fraud and misconduct. Later, they were awarded with party tickets for this act by the Indira Gandhi government in 1980 such that Devendra Nath Pandey rose to become a minister in the government of most populous state of India, Uttar Pradesh. This case was also mentioned by Jarnail Singh Bhindrawale to justify his claim regarding the hypocrisy of the Indian government.
This intrigued me further and I searched a bit more. Here’s more on the heroes of that story.
I will leave you with a quote from this book by Devendra Nath Pandey on the hijack incident-
“Yeh to deewanagi thi. Gandhi family ke liye deewanagi ki had tak samarpan tha” (It was an obsession and devotion to the Gandhi family”) Also, hijacking was not mentioned a crime then.
Marvelous!
Posted in General | 3 Comments »
Posted by Aditya Kuvalekar on November 10, 2011
This is too late to write about this lovely development. Thomas Sargent from NYU got the Nobel prize this year. I am not a macroeconomics guy. Neither am I an “economics and policy blogger”. So I have no qualms in declaring that I am absolutely incapable of writing about his work. This might be a good resource to read a bit of serious stuff about his work.
The purpose of this post is to narrate a sweet incident I witnessed a few days after he won the Nobel. I attended a Champagne session to celebrate this achievement where one of his students (unfortunately I don’t know her name) gave a small little talk about his work.
Apparently, Sargent was asked a few months ago about a question on Financial Crisis and some policy action to be taken. Sargent answered, “That is a question to be resolved by the model and the data”
When a Nobel laureate is that humble in admitting that economics is far harder than what may seem and most questions don’t have “obvious” answers as many bloggers and journalists think, maybe there’s some food for thought for those who think before they speak. For many Indian policy bloggers/journalists of course, these rules of humility do not apply.
Posted in Economics | 2 Comments »
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