When fidelity to an idea is too strong, cost-benefit analysis goes out of the window
E.g. demonetization,NRC
You can always argue it did some good. And whether that "good" is obtained at the right price can never be answered
Votaries will always claim price paid is reasonable!
E.g. demonetization,NRC
You can always argue it did some good. And whether that "good" is obtained at the right price can never be answered
Votaries will always claim price paid is reasonable!
This kind of a faith-based approach is all very well in the domain of religion
But in public policy it can be counter-productive
In part because the policy is never open to repudiation / falsification
But in public policy it can be counter-productive
In part because the policy is never open to repudiation / falsification
E.g. Demonetization
The costs were significant. Everybody agrees to that.
But was it worth it?
The answer from its proponents will always be YES! Even if it didn't capture a great deal of "black money" people will point to increased digitization etc
The costs were significant. Everybody agrees to that.
But was it worth it?
The answer from its proponents will always be YES! Even if it didn't capture a great deal of "black money" people will point to increased digitization etc
Whether these are worth the massive costs on the informal economy, becomes a matter of opinion and political alignment
Depending on whose side you are on, you decide whether the benefits outweigh the costs
Depending on whose side you are on, you decide whether the benefits outweigh the costs
And no...
I don't mean to say such faith-based reasoning is something pioneered by this administration
It has characterized much of our politics since inception
I don't mean to say such faith-based reasoning is something pioneered by this administration
It has characterized much of our politics since inception
E.g. So many Indians still back the 1969 nationalization of banks
Even though every sane analyst avers it has caused a great deal of financial repression, misallocation of resources in the economy, among other things
But still, for so many ppl nationalization was a good thing
Even though every sane analyst avers it has caused a great deal of financial repression, misallocation of resources in the economy, among other things
But still, for so many ppl nationalization was a good thing
If you ask them for data points in favor of nationalization, there will be vague references to the fairness of the banks, their concern for "priority" sectors, their ability to employ so many hundreds of thousands etc
Financial repression becomes a reasonable cost to pay ;)
Financial repression becomes a reasonable cost to pay ;)
And you see such faith based approaches elsewhere too
A classic example is of course the EU and Euro!
The affinity to idea of Europe is so strong that there is a conviction to make it work against all odds.
Whether it is indeed worth it is never seriously deliberated
A classic example is of course the EU and Euro!
The affinity to idea of Europe is so strong that there is a conviction to make it work against all odds.
Whether it is indeed worth it is never seriously deliberated
What's needed in public policy is a culture of scepticism/empiricism , a la David Hume
But that's too much to ask for from any part of the political spectrum
if anything, an empiricist outlook is viewed negatively as it constrains the set of possibilities and one's imagination
But that's too much to ask for from any part of the political spectrum
if anything, an empiricist outlook is viewed negatively as it constrains the set of possibilities and one's imagination
It is true that an excessively empiricist outlook can lead to overly conservative public policy
It can lead us to settle at local maximas
But in India we disdain empiricism too much. What's needed is a corrective towards greater empiricism
It can lead us to settle at local maximas
But in India we disdain empiricism too much. What's needed is a corrective towards greater empiricism
