Friday, January 13, 2012

Electoral bribery - a tale of two games?

Anecdotal evidence from electoral politics in many Indian states appears to indicate that all the contesting candidates pay reasonably similar amounts of cash bribes to all the voters.

On the face of it, this appears surprising since only one candidate can finally win the electoral race and the electoral race is high stakes and ultra-competitive. In the circumstances, conventional wisdom would have it that atleast some candidates renege on their bribe payments. Further, there should have been a bidding war among contestants to outbid each other in the payment of bribes. So what is the underlying story? Why do "all candidates" bribe "all voters"? Why are the bribes "reasonably similar"?

I am inclined to believe that there are two games being played here. On the one hand, candidates have to weigh the consequence of not making payments given the uncertainty associated with the response of the other side. On the other hand, candidates face the possibility of a potential bidding war in bribe payments.

Consider the first game, which is a defection game. Candidates rationalize bribing voters on the ground that voters have been socialized into expecting bribes and are likely to react negatively (turn against them) if their expectations are not met by any of the candidates. The undeniable reality of an availability bias associated with electoral bribing means that there is a strong likelihood for voters to form expectations about receiving some amount as a bribe. In fact, this expectation is likely to be more pronounced with the incumbent legislator.

The trend is widely pervasive in most parts of India, so much so that any candidate who defects, by not paying or paying less, is perceived to face certain defeat. The table below models a two-candidate electoral game where the decision point is about whether to bribe or not.

This brings us to the second game, the co-operation game. Interestingly, political parties too appear to have internalized the dynamics of the electoral game. Given the inevitability of bribe payments, all of them realize the massive costs associated with a bidding war where one party tries to outbid the other. Since these games are all repeat games, with the same parties fighting over multiple elections, there are sufficient incentives for all sides to embrace an equilibrium and co-operate. The result is an implicit understanding about the magnitude of their bribe payouts. The table below captures this game.

However, there is a small Bayesian twist to this tale which highlights the slippery slope down which both candidates and voters have slipped. Since all parties bribe voters, and voters have to make an electoral choice, they end up making their actual choices based on other considerations. But this choice is conditional on the receipt of bribes. In other words, while voters may make their choice based on several factors, this choice is mostly restricted to those who have paid the bribes. If this line of analysis is true, then all candidates end up defecting and bribing, resulting in a Nash equilibrium. Ironically, atleast in the short-run, the real winner in this is the voter!

So, conditional on receipt of the bribes, what are the factors that drive voting choices? A few intuitive answers include those who paid the larger amount, those perceived as leading the electoral race, those who have struck a chord with some local or emotional issue, and sometimes even those who are perceived as extremely corrupt. Given this, do we have a window of opportunity here to align the individual incentives of voters with general public interest and drive the agenda of contesting candidates accordingly?


KP said...

Dear Gulzar,

Interesting analysis, and recently I was at a policy event where the broad contours of the discusion was whether the expectations from the elected representatives ( MP's MLA's) .. are now personal.

The cynicism about broad nation building themes -who cares to read a manifesto, and who ever revisits a manifesto ? - and my own view that voters see politicians only as self interested businessmen, could be the underlying reason.

Control by the voter over the exact actions and policy choices of the elected representative is non-existent till the next voting season - and since most activities happen in an entirely non-transparent manner ( the transactional part of decision making where vested interests / bribes/ and the representatives own personal interests play a part) - the voter is playing wisely to maximize his outcome.

The voter ( particularly the poor marginalized) has wisely concluded that the only 'transparent' gain for him/her is to extract any largesse in cash or kind - and that may be the only nett benefit from the entire illusion of choice that he pretends (playing along just as much as the others are) to be a part off.

It could be that the effective choice that he makes is dictated by the lesser evil and other personal biases - but the other biases matter only after the hygiene factor - the basis for his participation is met.

regards, KP.

KP said...

Dear Gulzar,

I felt that my note did not convey what I wanted to .. so let me complete this.

The equilibrium situation does not mean the voter is the winner - it reflects the voters valuation of his opportunity to vote as being exactly the value he can extract - it reflects a minimal/absence of expectation.

It also is reflective of voter apathy to anything that follows - unless something particularly egregious were to happen - and really the threshold is so high - the corrupt system can get away with almost anything.

Which is why - voter response should treated as a last resort.

Institutional correctives that are continuous and close to immediate are what is needed. Rather than the dependence on voter memory - which is short/ biased by the immediate / apathetic / and the voters daily drudge leaves him / her with very little scope to react to issues with the urgency they require.

Using voting as a corrective or feedback mechanism is reasonable on issues that are umbrella issues so to speak - and even then the interpretation of the mandate is purely a matter of convenience.

Democracy is beginning to resemble a therapist couch - a chance to get things of your chest - making little 'real' difference to the situation at hand.


Urbanomics said...

Thanks KP. yes, I completely agree with you.

elections have truly become an outlet for letting off pent up frustrations.

Anonymous said...

Sir, this is a great analysis on this mother of bribes. Analysis has no boundaries...haha..

sorry I am Anonymous

Parag Waknis said...

If I understood right, you are trying to model the following phenomenon: Why do contestants bribe voters and why don't we see a continuous escalation in bribes paid on account of competition between candidates?

Given this, your analysis of the first question as a prisoner's dilemma is correct. The Nash equilibrium is indeed pay bribes. But I have some doubts about the second game. Strictly speaking to have incentives to cooperate, you need to model the second game as an infinitely repeated version of a prisoner's dilemma.

Here are some thoughts on how to do this: The game should be set up with two actions (pay more or pay less) for two candidates. It again becomes a prisoner's dilemma but with infinite repetition you can find some strategy and patience level (folk theorem to your rescue!) for which 'pay less' is sustained in equilibrium.

Now the important question is can you model candidates competing in elections held at frequent intervals as an infinitely repeated game. Secondly, there might be a limit to bribes simply because of resource constraint. Thirdly, if the candidates above do not perceive their interaction as infinitely repeated, then they know that 'pay more' is the equilibrium and hence after some level of bribes they just stop playing that game and compete on electoral platforms.