The King of All Telecom Scams — Part 5

[Previously in this series: Part 1, Part 2, Part 3, Part 4.]

There’s a saying in Hindi. “Raja vyapari toh praja bhikari.” If the ruler involves himself in business, the citizens are reduced to begging. Good old fashioned down to earth practical wisdom. Astonishing isn’t it that a people whose ancestors include Kautilya are reduced to such a sorry state that they allow the government to mess around in business and they don’t even understand that to be the cause of their immiserization. It’s something of a mystery. Well, not really. There are plausible explanations of how this came to be. For now, let’s look at the telecom scam and the press has been reporting on it. If you know the details already, there’s nothing new for you in this post.
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The King of All Telecom Scams — Part 4

[Previously in this series: Part 1, Part 2, Part 3.]

To the rather distinguished list of superlatives about India — the largest democracy, etc. — we can add “India is the largest banana republic in the world.” The Wikipedia notes that “the purpose of a banana republic is commercial profit by collusion between the State and favoured monopolies, whereby the profits derived from private exploitation of public lands is private property, and the debts incurred are public responsibility.” Generalize “public lands” in there to mean “public resources” and you have a pretty good description of what we have going on in India.
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The King of All Telecom Scams — Part 3

[Previously in this series: Part 1, Part 2.] Human behavior is complex and appropriately so since humans are complex entities. It is hard to analyze, understand and predict how people will behave in general. Compare that to inanimate matter. Basic laws of thermodynamics, a few laws of motion, a few conservation laws — and you pretty much know what to expect. Still there is one useful generalization about humans which goes a long way in explaining how we behave: we respond to incentives. Most simply (and perhaps simplistically) stated, carrots and sticks matter.
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The King of All Telecom Scams — Part 2

[Follow up to Part 1.] We will examine two issues now. Who actually pays for the spectrum? And, the nature of competition in the market as opposed to competition for the market. Later we will examine the notion of multiple equilibria and what the social welfare consequences of multiple equilibria are.
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The King of All Telecom Scams

The news is that the telecom minister in appointed prime minister Manmohan Singh’s cabinet finally resigned. The charge against him is that he sold off some spectrum at prices that brought in $X in revenues to the government, which is about Rs 1,70,000 Cr (~$40 billion) less than $Y which would have been the revenue had the spectrum been sold using some other method such as an auction or whatever. Time for me to inject some sanity in the insane figure of Rs 1.7 lakh crores being bandied about by the media.
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Takes Two to Tango

And now to sit down and consider the comments made on the three parts (Part 1, Part 2, Part 3) of “A Tale of Two Countries.” I hope to consolidate all the comments into major themes to keep this as short and succinct as possible. First let’s address a basic question. Who is responsible for the state that India is in? Is it the people or is it the leaders? The short clichéd answer is “it takes two to tango.” Ok, you will say, but who started it? It is hard to determine that to everyone’s satisfaction. Did the chicken come first or was it the egg? Putting the blame on one party leaves the matter in a Zen-like quantum indeterminate state of the sound of one hand clapping. (Ponder that for a bit if you will.)
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A few points on posting comments

Thanks to all who bother to post comments and advance the discussion. To make it easier on all of us, may I suggest that proof-reading before hitting the post button is important. Otherwise you have to waste time writing a correction. And one more thing. Please, please use html blockquote code to indicate, where appropriate, what specifically you are commenting about. See below for how to do that.
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A Tale of Two Countries — Part 3

{Previously, Part 1 and Part 2.}

Economic development – the main concern of this blog – is neither impossible nor inevitable. India, most unfortunately for the hundreds of millions of Indians who live lives of desperate poverty, is finding it nearly impossible to achieve any meaningful measure of development. Only in comparison to its own past does the India development story become somewhat palatable, but compared to other nations big and small, India does not fare well at all.
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If you wish to make an apple pie from scratch, first you must invent the universe

Happy Carl Sagan Day. Today it would have been his 76th birthday. So off I go to watch some favorite episodes of COSMOS on Episode 10 is one of my favorites: The Edge of Forever. See below for the video.
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