Monday, January 02, 2012

Black Swan in Dal Lake

The specifics of the CISF shooting will emerge in time. I'd like to make three larger points.

One. The governance capacity of the Indian State falls far short of the demands on it.

Two. This capacity deficit is dramatically exposed in conditions of extreme stress.

Three. Addressing this requires both capacity building and impact mitigation when the State fails.

Let me draw a parallel.

In Finance, credit analysts use two independent measures of risk. Probability of Default measures the odds that a borrower will fail to make the required payments in a given time frame. Loss given Default measures what the lender is expected to lose in the event of default by the borrower.

One can have a high probability of default (say, if the borrower doesn't have income to pay his interest) but low loss given default (say, if the loan is collateralized by real assets).

Imagine the Indian State as the borrower. It has borrowed governance authorities from the citizenry. In return, it must provide good governance as interest for the authorities it has borrowed.

Given its means to provide such good governance are limited, the Indian State defaults repeatedly. In other words, the probability of default of the Indian State is high, which manifests itself in a myriad of ways too numerous to list but familiar to us all.

This does not mean, however, that - when the State inevitably fails - the impact should be tragic. The loss given default can be managed and mitigated in the event the State defaults.


When the demands on the State are many and it further arrogates to itself a breathtaking array of responsibilities, it can either find limitless resources to satisfy these demands/responsibilities adequately, or cut corners everywhere to make its limited resources appear to be satisfying these.

The Indian State specializes in the latter. It pretends to do a lot while doing very little, and that too poorly. 

This pitiable circumstance is made much worse under conditions of stress. All human systems are designed for "acceptable" fault tolerance levels. They work - more or less - under normal conditions but start fraying at the edges under stress. Even the best of systems will fail, by design, under extraordinary stress. The black swan cannot be evaded.  

A State with means designs systems that fail in extremely rare circumstances. A State without means designs systems that fail far more frequently. What is manageable stress for the former can be extreme for the latter. These are tradeoffs States make based on their political and economic realities.


That Indian State is designed poorly and fails - repeatedly and pervasively - shouldn't be surprising. India has a patronizing State that thinks it must supervise and control every aspect of human existence. Its reach exceeds its grasp by a mile, but that doesn't seem to deter its dismaying ambition. 

Should we really be shocked that Indian security forces are simply not equipped enough to do their job professionally? I've written about the Indian police previously here. What these forces lack in capacity, they make up in brutality.

The excesses of poor policing are amplified in places like Kashmir or the North East where war-like conditions have prevailed over extended periods of time. The fault tolerance of the State has a much worse threshold in these conditions.

Clearly, the people who live there know this. Their provocations are partly a means to expose the weakness of the State through its dramatically tragic failures. The fact that a young child dies is supremely tragic - but his death becomes a very powerful stick to beat the State with. Such opportunistic cynicism is at least as bad as the original tragedy.

These tragedies will continue, alas, because the State is weak and brutal AND its foes are not above exploiting the death of a young child to make their political argument.


So what is to be done?

Far be it for me to suggest solutions to the cynicism of the human heart.

But, this is not an altogether hopeless situation. We may not be able to stop State failures in the short term but we can and must mitigate their impact. With that in mind, here are a few suggestions:

1. Strengthen State capacity

This will take time and resources and - most crucially - a willingness of the resource-constrained State to focus on the things it must do and let go of things it need not do. Also, merely because the horizon for this is the long-term does not mean the State can make pious noises and go back to its comfort with failure. The long-term after all is a series of short-terms - so the effort has to begin now.

2.  Identify State failures that hurt national interest

Not all State failure is created equal. My parents await their passport renewal four months after application but this is not a life and death issue. A high school kid being shot in his chest, merely for protesting, is.

So, State failures should be analyzed to identify those whose impact is so severe as to damage national interest. Every Kashmiri kid who is shot while protesting non-violently, for example, falls in this category. An innocent Indian dies, the stress on the State rises further causing even more failures, and India is demoralized by the politicization that follows.

Identifying such failures is crucial if India is to prevent them in the long-term and mitigate their impact in the short-term.

3. Mitigate failure impact

Once the State knows its greatest vulnerabilities, it should mitigate their impact. This requires resources, yes, but in a prioritized way. So, maybe my parents can wait another month for their passports but if that delay creates resources to buy rubber bullets for CISF, it's entirely worth it.

India wouldn't have strengthened its governance capacity as the CISF jawan would still shoot at the kid. But, at least, the kid won't die.


This is basics of management. Why the Indian discourse doesn't take this form baffles me. All the debate tends to be is about disputes on a specific tragedy, arguments of political oneupmanship, and a transient outrage that solves nothing.

Instead, the conversation should be about how to fight off the Black Swan when it inevitably flaps its wings.

1 comment:

Vikram said...

This is interesting analysis, but I am not sure if it applies in the Kashmiri context. The paramount failure in Kashmir is not one of governance, it is political. The Indian state has a great (perhaps unmatched) ability to hold (mostly) free and fair elections in even the most troubled areas. But the elections in Kashmir were repeatedly rigged due to the Indian mainstream's perceived security exigencies, not due to any governance failures.

But I do agree that addressing the governance failures will help in ensuring a better climate for finding a political solution in Kashmir.