Close elections

Politics can sometimes be an contest between profoundly different visions about how to run the country. In Germany in the early 1930s, it mattered greatly whether the liberals, the communists, or the Nazis won elections. Each stood before voters with a very different view of what should be done: the liberals wanted to build a democracy with markets, the communists wanted to imitate Lenin's carnage, and the Nazis wanted to innovative in new kinds of carnage. In such times, elections were passionate affairs which mattered greatly.

One of the most remarkable things which took place in the West was the consensus which coalesced around the liberal democracy. The West had figured out that religion should be kept out of the State by the eighteenth century. At the end of the second world war, everyone who looked back at the ghastly record, of the communists and the Nazis, shook their heads and decided that the only way that made sense was a liberal democracy. Now elections were limited to less contentious problems, such as the extent to which the State should get involved in the economy.

By the late 1980s, the evidence was in on this question, and there is now a large consensus about the appropriate role of the State. Most thinkers today agree that the job of the State is to produce public goods, and stop at that. Politicians to the left and politicians to the right these days sing the same tune of providing an enabling environment in which flexible markets shape the economy.

In this environment, the questions left to be sorted out in elections are fairly mundane questions, such as the live issues of economic policy of the day. Every economic policy proposal has certain gainers and certain losers. If the government of India does good things in the aviation sector, it will hurt Jet Airways, Indian Airlines and Air India, while benefiting millions of users of air transportation in India. Reforms to fertiliser policy benefit farmers at the expense of fertiliser manufacturers. The arena of politics in many countries is reduced to dealing with such unglamorous problems.

The positions of a party on these mundane questions do not flow from deep-seated ideology. We can think that an ambitious party will choose positions which help in winning elections, subject to the constraints of their constituencies and their sources of funding.

How should a party choose positions which win elections? There is a new sophistication in marketing science that is being applied into this. A "focus group" is a small room of typical voters on whom alternative positions are tried out. A party can try out many competing positions on focus groups in key marginal constituencies. This is much like test-marketing of a product, to choose the product characteristics which will best enable the product to sell. Focus groups and polls give parties constant feedback about where voters stand, and parties can constantly adjust themselves to find the ground where the most votes are to be won.

This may seem most cynical when compared with traditional notions of politics, where positions flow from lofty ideology. However, this is actually a triumph of democracy, which is all about giving people what they want. Marketing science, when applied to politics, allows the views of the people to directly drive the positions of political parties. It is useful to see that this phenomenon can only take place in a context where the grand questions have been resolved: It would be extremely bizarre if Nehru had used focus groups as an oracle to guide him in resolving grand questions.

Now, there is no great secret about focus groups and custom polls: two parties can play the game as well as one. If two parties have equal talent in marketing science, then the positions that they take should prove to be broadly similar, and the votes that these positions capture should be close. That is, we should get close elections. Strictly, parties are not free to choose their positions based on only maximising votes: they are constrained by their constituencies and sources of funding. This will give some variation in positions; however a well functioning democracy would be one in which the marketing experts dominate the moneybags.

In such a world, the positions of competing parties should normally be very alike, and elections should normally be close. Once all this is in place, human factors will matter: such as Bill Clinton's charisma (which wins elections) or George W. Bush's arrest for drunk driving (without which he would probably be the president of the U.S. today). But on average, with roughly symmetric human factors, the "efficient markets" outcome is an election which ends in a dead heat. This is not a failure of democracy; instead it is the highest achievement of a system that works for the people.

This paradoxical "efficient markets" outcome reminds me of the randomness of financial prices. When prices move randomly, it is not a failure of the market process; instead it is the highest achievement of a system that processes information properly.

Where are we in India on this path to modern marketing--science democracy? We have some distance to cover on two fronts: (a) Resolution of grand questions and (b) Induction of marketing science.

We have not yet finished with the grand questions. Do we, as a country, think that it is okay to butcher Muslims on the streets of Bombay? The lack of enforcement after the pogrom of 1992 is proof that we have not yet figured out how to be a law-abiding liberal democracy. Sunil Khilnani's marvellous book "The Idea of India" is about this great question, which has yet to be fully resolved. Our political process is groping in a maze of petty tribal loyalties; we have yet to agree upon a modern notion of India.

In addition, our political parties have not yet got the marketing science in place. As of yet, I believe that our political parties do not systematically use focus groups and polls in shaping party positions. I think that the induction of marketing science into the normal functioning of political parties in India would do a world of good, in increasing the importance of the interests of the people, and reducing the extent to which narrow constituencies and sources of political funding dominate the agenda. My sense about numerous economic policy problems is that politicians would take economic reforms a lot more seriously if they were able to tap into the interests of the people, instead of focusing on the interests of the politically mobilised constituencies which they continually encounter.

It appears obvious that the next Rs.10,000 which will go into bailing out banks is much better spent on health and education; it seems obvious that policies that benefit a few in the aviation or telecom or fertiliser sectors are not in the interests of the people. Marketing science should help in closing the loop; in producing a more direct link between policy positions and the interests of the people. It will also make elections much more interesting.

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