[Reader-list] if you thought paranoia had limits...

[Shivam]

To ridicule an argument is the easiest thing to do; to understand it
the most difficult.
S


Costs and benefits of quotas

T T RAM MOHAN
ET CONTRIBUTORS[ MONDAY, APRIL 24, 2006 02:21:04 AM]
The Economic Times Online
Printed from economictimes.indiatimes.com > Columnists> T T Ram Mohan
http://economictimes.indiatimes.com/articleshow/1500848.cms


Making transparent the costs and benefits of quotas should help evolve
a policy that is acceptable as much to disadvantaged groups as to
those who see themselves as losers.

The shrill denunciation in certain quarters of the HRD ministry's
proposal to extend OBC reservation to central universities, including
elite institutions, is notable for its disregard for fact. Prejudices
are aired and assertions made without any reference to the body of
theory and evidence that has accumulated on the subject of affirmative
action (AA).

AA can take many forms. Prescribing quotas is one of them. Like any
social intervention, AA carries costs and benefits. AA policy must be
based on an estimate of the costs and benefits of AA in a given
context. Thomas Weisskopf, a professor of economics at the University
of Michigan, provides a framework for cost-benefit analysis in his
definitive work on the subject (Affirmative action in the United and
States and India, Routledge).

The central objective underlying AA, Weisskopf points out, is better
integration of society's leadership. This is, of course, essential for
democracy and for greater harmony in society. But — and this is often
overlooked — there are significant efficiency gains as well.
Leaders from under-represented groups serve as role models for their
groups and help spur performance among peers. In jobs that require
dealing with disadvantaged groups, leaders from those groups could
contribute better than those from outside. Social capital is created
in under-represented groups. There are gains from diversity.

It is vital to grasp that efficiency in society does not result from
selecting the best academic performers alone. It can result from a
variety of other sources of the sort mentioned above. It is this
recognition that has driven AA in the US, where AA is neither mandated
nor authorised by the Constitution.

There is a disarming line that those opposed to quotas are apt to
take. They say they are all for reaching benefits to the
disadvantaged. But this is better done through ways other than
caste-based quotas. Weisskopf addresses some of the propositions
commonly heard.

1. Use socio-economic, rather than caste, criteria: why should a poor
Brahmin lose his seat in an educational institution to an affluent
OBC? This argument misconstrues the objective of AA. AA is not about
reducing socio-economic inequalities. It is about reducing
inequalities between various groups in society. Using AA to reduce
inter-group disparities does not in any way preclude efforts aimed at
reducing socio-economic inequalities.

2. Quotas mainly benefit the privileged in the target groups. This is
true but, again, AA is not intended to reduce inequalities within the
target groups either. It is intended to produce adequate
representation for the target groups as a whole.

3. Intervention is best done, not in higher education or in jobs, but
at the primary level and through superior economic assistance. The
difficulty is that resources required for the latter approach are much
larger. AA in higher education and jobs is less costly and the results
are better monitored.

Opponents of AA are on surer ground when they point to the costs it
imposes. A big cost is dilution of quality in academic institutions.
There is evidence that those selected through AA continue to
under-perform in their academic careers. This forms the basis for
vehement opposition to AA — "merit is sacrificed" — but several
caveats are in order.

First, cut-offs for entry may be lower for AA candidates but these
could still be high in absolute terms where the applicant pool is as
large as in India. Secondly, the majority of AA candidates do
graduate, which means that they meet the quality requirements of the
concerned institutions.

Thirdly, the gap between AA candidates and others narrows over time as
AA candidates selected tend to be from the second or subsequent
generations and have had the advantages of a superior environment (the
'creamy layer'). Fourthly, the gap between AA candidates and others is
considerably less in post-university career achievements than in the
university. For all these reasons, the dilution in quality is far less
than is commonly supposed.


AA imposes several other costs: the exacerbation of group identities
and complacency among target groups, for example. But the fact that AA
imposes costs does not negate the case for it. It only implies that AA
policies should always be pursued with a fine sense as to the costs
and benefits they generate. In other words, the design of AA policy
and monitoring of its effects are crucial to its success.

Weisskopf spells out key parameters in AA design. The target groups
must be defined correctly — the groups must clearly be those whose
have suffered from past discrimination or lack of opportunity.
Secondly, the magnitude of preference must be carefully chosen.

If quotas are large, entry standards would be lower than with smaller
quotas and a higher proportion of those selected will fail to perform.
This has an adverse impact on the institutions concerned and it also
tends to discredit AA policy. Choosing the quota level correctly is
especially critical because, once introduced, it is not easily
abandoned.

The preceding discussion provides pointers to how the HRD ministry's
proposal might be carried forward. First, it would be desirable to
phase in quotas for OBCs, starting with a quota of, say, 10% —
remember, the higher the quotas, the bigger the costs. Secondly, any
subsequent increase in quotas could be linked to an increase in
overall seats. This will incentivise institutions to increase seat
availability and help calm passions.

Thirdly, future increases in quotas must be based on a meticulous
analysis of the costs and benefits of quotas. A research committee
must be constituted for the purpose that will periodically review the
effects of quotas. It will judge, among other things, whether any
groups have advanced sufficiently to qualify for exclusion.

Making transparent the costs and benefits of quotas should help evolve
a policy that is acceptable as much to disadvantaged groups as to
those who see themselves as losers. It also sends out the reassuring
message that AA policy in India is grounded in rigorous analysis, not
in vote-bank politics.

(The author is professor, IIM Ahmedabad )

(c)Bennett, Coleman and Co., Ltd. All rights reserved.
--------------------------------------------------------------------------------

On 4/21/06, aasim khan <aasim27 at yahoo.co.in> wrote:
> Hi folks,
>
> The following text is a rage in infosys and other IT
> company (young) emloyee brigade:It goes as a letter
> written by a guy fifty years down the line...stinker i
> would say.also huge in terms of span...but are we all
> feeding on our own paranoias on the
> anti-anti-mandal???
> Twice negative...does that make anything positive.
>
> read on....
> -----------------------------------------------------
> Ahmedabad, 30 April 2056: I attended the bash at the
> IIM-OBC Alumni Association to celebrate the fiftieth
> anniversary of the reservation of seats for OBCs
> (Other Backward Castes) in IIMs. Since I'm not an OBC,
> I was not supposed to attend, but at present, we MBFCs
> (Moderately Backward Forward Castes) together with the
> Non-Scheduled Tribes have a political
> alliance with the OBCs. We sipped champagne and talked
> about how so many of us had progressed from reserved
> seats in the IIMs to reserved jobs to reserved
> promotions. Unfortunately, the party broke up when a
> Non-scheduled Tribes faculty member objected to the
> OBCs dancing with all the pretty girls — he wanted
> equal opportunities for every caste at each dance. I
> pointed out that the Non-scheduled Tribes had exceeded
> the quota of champagne reserved for them. The party
> ended in a pitched caste battle.
>
> 1) May 2056: Today, I became president of the IIM
> Board of Directors. Under the present rotating
> presidency system, a member of each caste is made the
> president by turn. When it was the turn of the MBFCs
> for president, they had to choose me because I'm the
> only MBFC on the campus. True, I'm only the campus
> dhobi, but then every caste must be given an equal
> opportunity. All those centuries of oppression by the
> OSBFCs (Only Slightly Backward Forward Castes) and the
> OFCs (Other Forward Castes) must be rectified. I hope
> to restore the high standards at IIM — I overheard
> some foreigners calling it the Indian Institute of
> Morons, the other day.
>
> 2) May 2056: They've announced the cricket team for
> the series against Australia. I was overjoyed when
> they chose an MBFC man as captain. But my hopes were
> dashed when I realised he was a Most Backward Forward
> Caste and not a Moderately Backward Forward Caste. The
> selection committee lamented that it was gross
> discrimination that no member from the Jarowa tribe
> (the Stone Age tribe in the
>
> Andamans) had ever found a place in the Indian cricket
> team. A squad has since been dispatched to the
> Andamans to capture a Jarowa tribal to play in the
> national team. I hope he will improve their
> performance — they had an innings defeat against the
> Maldives recently. I would have played myself except
> for the fact that I lost a leg some years ago when I
> was in hospital with a toothache and a doctor
> recruited through the Unscheduled Caste quota
> extracted my leg instead of my tooth.
>
> 3) May 2056: There are too many NFCs (Neo-Forward
> castes) in the IT business. Under the terms of the
> Business Reservation Act, their firms will now be
> taken over by the other castes. I hope they will be
> able to restore the Indian IT industry back to its
> former glory. For some unfathomable reason, it has
> gone down the drain after job reservations were
> implemented. I went for a movie featuring star actor
> Mungeri Ram. He may lack teeth, be four-feet-three and
> have hair growing out of his nose, but this year it's
> the turn of the EBC-RYs (Extremely Backward
> Caste-Rural Yokels) to be stars and Mungeri Ram is the
> best of the lot. I wonder why foreign movies have
> become so popular.
>
> 4) May 2056: A truly great day. We now have an OFBMBC
> (Other Forward But Moderately Backward Caste) general
> as the Head of the Armed Forces. I hope he'll be able
> to win back the territory we lost ever since
> reservations were implemented in the Army. Since then,
> the north has been taken by Pakistan, the North-east
> by China, the east by Bangladesh and the south by Sri
> Lanka and the Maldives. Only last winter, we lost the
> war against Bhutan and free India is now limited to
> the western coastal states. But I'm sure the OFBMBC
> general will turn the tide.
>
> 5) May 2056: My wife and I have been blessed with a
> bonny daughter. Since my wife's an SBBNSBC (Slightly
> Backward But Not So Backward Caste), my daughter will
> be an MBFC-SBBNSBC. I must lobby for reservation for
> her caste. She's the only member and I'm sure she has
> a great future.