Sunday, 4 August 2013

Manual Scavenging and Nash Equilibrium

Recently, I was having a conversation about the manual scavenging issue in India discussed in Satyameva Jayate1 and how the law enacted to abolish manual scavenging was of little help. For example, Indian railways, one of the largest rail networks in the world, is still using open discharges. This means that the Indian railways' 115,000 km long track also makes it probably the world's largest open toilet. This also means that it is highly likely that humans are still being used to manually clear the wastage especially in the tracks near the stations. May be not with bare hands, but with brooms and hosepipes.

This is an example of a situation where enacting laws doesn't necessarily help the affected people nor stop them from continuing the prohibited.

Kaushik Basu, former Chief Economic Adviser to the Government of India, in his book 'Beyond the invisible hand: Ground work for new economics' explores reasons for such failures in proposed laws. 

Law makers while creating new laws often fail to create or envision a system in which an individual cannot act unilaterally, to move to a better state, by breaking the law. In other words, in a system where an individual sees a better utility beyond what the law prohibits, then it is likely that the individual will violate the law. Once the individual is in a state where he cannot get any better utility, then it is very unlikely for the law to be violated.

In game theory, such a state, given all other conditions, where an individual cannot unilaterally move to a better position, is defined as 'Nash equilibrium'. Named after John Nash, the mathematician who is known better as the protagonist in the Hollywood movie 'A beautiful mind'

Basu describes Nash equilibrium as

"A choice of action (or strategy) by each player constitutes a Nash equilibrium, if these choices have the property that, given every other player's choice, each player feels that it is not possible to do better by altering his or her choice.2"

Basu stresses that if an announced law is not a Nash equilibrium, then it is preordained to fail3. When concepts like Nash equilibrium is not taken into consideration then the presence or absence of law is insignificant. Meaning, irrespective of whether a law exists, the society would continue the prohibited practice. And when there exist a Nash equilibrium, then even in the absence of a law, those actions will not be performed by the society. 

Applying the Nash equilibrium to the case of manual scavenging possibly explains why this law is violated easily both by the workers and their employers. Currently in India we have a system where manual scavenging is prohibited by law. Now, for this law to be effective, the onus is on both the workers and the employers. It should be noted here that the workers are not coerced to work as scavengers. It is more of a voluntary agreement and hence both the parties should play by the rules for the law to be any effective.

From the workers point of view, at least three conditions should be satisfied for them to not take up the scavenging work. Firstly the scavengers should have an alternative employment if they cannot not work as manual scavengers anymore. Secondly, this new employment should provide an income that is better than their scavenging work. And finally there should not be any scavenging opportunities that could lure potential scavengers from their current job, say with a higher pay or less work load. If any of these conditions are not met, then this provides an opportunity for the workers to choose a better option then their current state. The better option in this case is manual scavenging. And this is precisely what one of the scavenging workers had to say about her work

“I am happy with my work. This work is easier. Earlier, I used carry bricks on my head, which was back-breaking.4

A scavenger worker feeling happy about her work might surprise many. But the reality is, in the given state of things, this is probably the best outcome the worker could get. As soon as they see a better, sustainable option then what their current one, then it is likely that they will move out of their current state irrespective of what the law states.

The same principle can be extended to the employers of manual scavengers as well. As long as the employers get better utility by choosing to employ manual scavengers, they are likely keep employing them one way or the other and as a result keep violating the law. So, for the employers to actually stop employing manual scavengers declaring the work as illegal alone is not sufficient, but there should exist a viable and affordable alternative.

Based on this, a parallel can be drawn to other laws in India like the laws against corruption, child labor and media piracy which are almost ineffective.

Thus creating new laws without taking into account of concepts like Nash equilibrium will only ensure that laws are as ineffective as possible. Nash equilibrium may not be a sufficient condition for all social issues but it will be a necessary condition for most of the laws to meet its purpose. Policy makers and law makers should probably think along these lines rather than piling up ineffective laws for the sake of creating one.  

I am no expert in the area of economics and policy making. I have only tried to apply the ideas, that I understood from Basu's book, to the issue of manual scavenging. Any misinterpretation of Basu's ideas only shows my lack of understanding of the subject and not what Basu actually says in his book 'Beyond the Invisible Hand: Groundwork for New Economics'.

2. Basu, Kaushik. Beyond Invisible Hand: Groundwork for a New Economics. Penguin Books, 2011, p.63 
3. Basu, Kaushik. Beyond Invisible Hand: Groundwork for a New Economics. Penguin Books, 2011, p.66