Thursday, July 8, 2010

Should Indian politicians be paid more?

The Economist compares about salaries of top politicians across the world,

"Lee Hsien Loong, the prime minister of Singapore, tops our list of selected leaders' salaries. He is paid more than 40 times the city-state’s GDP per person. At the other end of the scale, Manmohan Singh, the prime minister of India, reaffirms his reputation for saintliness by taking a modest sum from Indian taxpayers ($4106 per year or less than two times the GDP per capita in PPP terms)."

Wish somebody could calculate and compare the informal remuneration (read rents/bribes) recevied by the average politician across the world! The sum of both - salaries and informal rents - would be a more accurate reflection. My guess is that the averagee Indian politician will still remain somewhere at the bottom (is it because he sells himself cheaper than his counterparts elsewhere!).


PrideOfMatchingham said...

No Gulzar, our politicians donot sell themselves cheap.

1. Donot compare PM to PM. Compare average cost of a politician as a percentage of GDP.

2. They dont sell themselves cheap, though in absolute terms it might appear so. Compare their cost as a multiple of per capita GDP for your economically inclined brain and it would be clear.

3. See how the wealth of our politicians multiply!! They are successful businessmen and industrialists!


gulzar said...

thanks for ur comments

the graphic compares the salaries of PMs of these countries, both in absolute and multiple of GDP per capita terms (which is almost the same as percentage of GDP). i have assumed that more or less the same ratios hold good for distribution of rents across the chain.

on further reflection... one of the reasons for the lower average rents could be that there are a larger number of rent-seekers in each chain (ie, more people demand rents for the same activity!).

i am also inclined towards the view that proportions are heavily skewed in favor of those at the top. in other words, those at the top skim off a disproportionately larger share than their counterparts at the field level. but the net result is that the average politician gets only a small amount.

about the wealth of our politicians... i am not sure whether there is a tight enough causation arguement. may be a case of co-relation...

are more businessmen entering politics? if so why? is it because political power facilitates expansion of business interests - by enabling hassle free procurement of various permits etc, and access to valuable insider information (say, buying land before a new project is announced, or even choosing the location of a project close to ones preferred location) - that competitors do not have access to?

will be interesting is somebody could study this by examining the profiles of MPs and MLAs with business interests... an objective assessment can lead to a more meaningful debate on this.