Our Westminster model is good but we need to fix its incentives
Our Westminster model is good but we need to fix its incentives

A range of electoral systems can provide democratic representation. These include Westminster proportional or first-past-the-post (FPTP) system, and the presidential system. India’s follows the Westminster FPTP system.

Every now and then we hear a voice to asking that our system be replaced with something else. But is our system the problem or the way we implement it?

Further, as Robert Dahl observed, “A country where the underlying conditions are highly favourable can preserve its basic democratic institutions under a great variety of constitutional arrangements”. The most important underlying condition involves the design of incentives in the system.

Indeed, two democratic frameworks which look exactly alike on the surface can lead to dramatically different outcomes based on whether their incentives are able to achieve the outcome of attracting good people to politics. While the Australian system elects brilliant and honest representatives, the Indian system largely elects incompetent and corrupt representatives. In fact, it can be argued that the Indian system actively prevents honest candidates from contesting.

But here’s the deal: both have the Westminster system. What then explains their radically different performance?

Without understanding the cause of this different performance, we will end up with the same issues even with a presidential system. In other words, our most corrupt politician will become President.

In the end, almost everything in human action boils down to incentives. A good system must create incentives for good people to contest elections. It should ensure that good people have a reasonable chance of getting elected.

Indeed, objective analysis of the systems shows that the Westminster FPTP system is basically very good. It gives a strong mandate to the party supported by the largest number of voters, regardless of whether the majority of the population supports the party. Where necessary, the largest party can align with a few small parties or independents to form a coalition. The FPTP system is flexible and ensures stability.

It is also highly responsive. If someone is found unsuitable to lead, the legislative party can quickly replace him. The “no confidence motion” system allows ongoing restraint on the government should it stray too far. The Westminster FPTP can easily get rid of a non-performing Prime Minister

The Cabinet system ensures that highly talented – and elected – people are given significant responsibilities and all decisions are finalised by the team. Team decisions are generally better than decisions taken by individuals.

Then, the Westminster FPTP system keeps barriers to entry quite low. It allows fresh blood and new ideas to be injected rapidly. Despite AAP’s ideas being extremely poor, there is no doubt that parties like AAP are able to rapidly come in because of the Westminster FPTP system.

A presidential system is stable, but stability is not necessarily a virtue. Responsiveness is very important. The presidential system performs the worst on this measure since a president can’t be removed before his tenure ends, without undergoing the extensive process of impeachment. Jokers and dunces (like Trump and many of his predecessors), once elected, are free to squander taxes till the end of their tenure.

The key issue is, of course, that our Westminster model is in shambles. That is the problem we face.

The reason for this is to be found by looking at the incentives. A good candidate in India can lose huge amounts of money in elections and even go bankrupt. On the other hand, Australia reimburses candidates on the basis of the votes polled, thus reducing the risk of candidates losing money during the electoral contest. This lets good people contest.

Further, India pays its representatives very poorly. Australia pays its representatives quite well, instead. That allows competent people (who generally earn well above the average) to join politics – something that can’t happen in India under the current design.

The numbers simply don’t add up in India. The incentives are skewed: only the corrupt and/or incompetent can succeed in India.

To fix the system we need to ensure that election expense limits are removed. This will allow for complete transparency in fund raising and expenditure; thereby leaving no incentive to lodge false electoral expense statements. Second, government must partially reimburse election campaign expenses (on a per-vote basis). Third, elected representatives must be paid salaries comparable to what senior managers get in the private sector.

Discussions on the presidential system should be put on hold and the focus shifted to reform of the current system.

Of course, such reforms won’t be the panacea in themselves. These reforms can’t ensure that elected representatives won’t abuse their powers. That will require many other reforms including the right policies (minimal government) and citizen vigilance.

But this much is clear: without implementing these basic reforms of the electoral system, India will always remain a banana republic – regardless of which democratic model we use.


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