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Photo: AFP
Photo: AFP

Bootleggers and baptists in conservationism

India needs to design its environmental policies carefully. These should address genuine concerns without killing economic growth

Much has been made of the present government’s policies to ease environmental clearances in order to promote industrial development. Opponents of the government’s policies note that the government is opening up possibilities of large-scale and long-lasting environmental damage by speeding up clearances. The government in its defence has countered that environmental regulations had effectively become a proxy for stopping industrial and developmental activity, and had been hijacked by vested interests.

This is a classic case of the bootleggers and baptists framework in action. This framework was introduced by regulatory economist Bruce Yandle in the early 1980s, and refers to regulation that serves the purpose of both people who are genuinely interested in the regulation and nefarious people who wish to profit from undermining the regulation.

The classic example that Yandle presented was laws banning the sale of liquor on Sundays in the US in the 19th century (a similar measure was tried in Kerala a few months back).

Baptists support the law for moral and religious reasons. Bootleggers, on the other hand, support the law for it would prevent legal sales of alcohol on Sundays, thus increasing their profits. The involvement of the baptists in the campaign for regulation provides bootleggers moral cover to have their way.

In the context of Indian environmental regulation, bootleggers refers to the vast coalition that seeks to profit from curbing industrial growth and development. This includes but is not limited to industries seeking to stifle competition (by preventing competitors’ plants from being built), political parties that rely on people’s poverty and backwardness in order to come to power, and local politicians with vested interests.

The baptists are environmentalists, conservationists and people who are truly interested in the green cause and ensuring sustainable development. Their motivations are straightforward, in that they do not want any developments that could cause lasting damage to natural resources, and they believe that strong environmental regulations are necessary to guard natural resources and ensure sustainable development.

Bootleggers have two ways of lobbying the government to pursue their interests—they can either lobby directly by means of party contributions and favours, or they can simply fund the baptists who are pursuing the same cause. The claim in India is that environmental bootleggers have been funding some of the baptists (environmental agencies and not-for-profits) in order to pursue their own private interests.

It is in this context that the present government barred certain organizations that have been allegedly accepting so-called bootlegger funds from receiving contributions from abroad. It is in the same context that Greenpeace activist Priya Pillai was prevented from travelling abroad recently.

The challenge for the government in such bootleggers and baptists cases is to design policy that is broadly in line with the demands of the baptists, while at the same time designing the specifics in a manner that the bootleggers will not be able to take advantage of the regulations.

In the Sunday liquor example, one such measure would be tax liquor sales on Sunday at a higher rate, which has the dual effect of reducing alcohol consumption on Sundays while still keeping the bootleggers out of business.

That environmental regulations and clearances are being hijacked by bootleggers is no reason to do away with them, for that exposes us to the risk of environmental damage and degradation. What is required here is a carefully designed policy solution, which protects the genuine interests of environmentalism and conservationism, but at the same time cannot be used by vested interests to stifle industrial development.

Karthik Shashidhar is a freelance management consultant and data scientist. He is also resident quant at the Takshashila Institution, adjunct faculty at IIM Bangalore, and writes the Election Metrics column for Mint.

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