An Early Prediction For India's 2019 Election

In financial markets, two types of analysis are common. Fundamental Analysis goes into all the factors that affect markets, and attempts to predict them, and thereby their impact on the prices of assets. But Technical Analysis completely ignores fundamentals. Operating under the idea that "price discounts everything", Technical Analysis looks purely at the movements of prices, and attempts to discern patterns from time series data.

I've decided to do some Technical Analysis of the Indian Lok Sabha (parliamentary) elections. I'm going to look at vote shares and seat shares, without worrying about the fundamentals that impact them. We will see that this approach has some merit too.

The Indian parliamentary elections of 2019 are likely to be the biggest in the world, as usual

First off, I noticed a curious fact, i.e., that the sum of the seats of the two main parties, the Congress and the BJP, has been virtually the same in the last two elections, suggesting that the gains of one come mainly at the expense of the other and not any third party.

[In 2009, the Congress had 206 seats to the BJP's 116, for a total of 322. In 2014, the BJP had 282 seats to the Congress's 44, making a total of 326. The strength of the house is 543.]

I then plotted the correlation between the BJP's vote share and its number of seats between 2009 and 2014, interpolating for all the percentages in-between. A screenshot of the spreadsheet is below.

A straightforward analysis with some stark results

In interpreting this spreadsheet, I made two fundamental assumptions.

1. The BJP's vote share of 31% in 2014 is unsustainably high, since it represents a swing of 12% in a single election. It will have to drop in 2019.

2. However, the BJP's vote share is unlikely to drop below its 2009 level of 19%. That represents its core base.

Hence, we have to look at all the vote share percentages from 20% to 30% (inclusive) to assess the likely outcomes.

And two facts are immediately obvious from this analysis:

1. The BJP will not succeed in replicating its absolute majority in 2019. Even a 1% drop in vote share will take its seats tally to 268, which is below the 272 required for an absolute majority. Hence a coalition government is virtually guaranteed even if the BJP does return to power. It will have to be as part of the larger NDA coalition.

2. It is highly unlikely that the Congress-led UPA will return to power. The BJP's vote share will have to fall from 31% all the way down to 22% or less, for the UPA to have a chance at returning to power. In no case will the Congress get an absolute majority on its own.

In spite of these fairly certain outcomes, the power dynamics after the results are out are likely to be very interesting. A lot depends on the personal characteristics of Modi himself. His flexibility, humility and ability to reach out to different groups in a spirit of compromise will be on test. So far, he has shown discomfort in dealing from anything but a position of absolute power.

Those days now look numbered.

Rejoicing That The System Works

On 8 September 2012, there were council elections in the state of New South Wales in Australia. Nothing remarkable about them, except that this time, I forgot about them and did not vote.

In most other countries, the only upshot of an omission like this would possibly have been a sense of regret that one missed a chance to influence the outcome. In a country like Australia, though, where voting is not just a right but also a duty, the consequences had financial bite. 

I received the following penalty notice in the mail a few weeks later, informing me that I owed the exchequer $55 for my sins.

 Note that they do give you a chance to explain why you failed to vote. They also helpfully give you a website to register for an automated email or SMS reminder so you don't get caught out the next time.

They cover other possibilities as well, such as if you did vote (and they seem willing to take your word for it if you merely declare that you did so!), and also let you take the matter to court if you so wish.

I had no option but to pay up, of course, since "I forgot" is hardly a legitimate defence. But all said and done, I was impressed. The sheer efficiency and fairness of the system left me marvelling. Even with my embarrassment at being a violator of rules and the pain of losing $55 (more than a week's worth of lunch), I found myself admiring the beauty of the system and feeling pride in my adopted country.

I was powerfully reminded of the saying that a true patriot is one who receives a parking ticket and rejoices that the system works.

I guess I'm a patriot, then!

Australian Election 2010, and What It Means

I must say I expected something like this. In fact, a hung parliament with Labor slightly ahead of the Liberals reflects my feelings exactly. It's nice to know the entire country feels the way I do :-).

I daresay we wouldn't be in this situation if we had Peter Costello leading the Liberals. It would have been a slam dunk. Instead, we have the aptly named religious nut Tony Abbott in charge. Call me what you will but I refuse to vote for a politician whose policy manual is religious scripture (and it doesn't matter what religion we're talking about). Abbott has been considered unelectable for a reason, and that is now clear in these results.

At the same time, there's tremendous anger against Labor, and Julia Gillard by extension, for what was done to Kevin Rudd. They were punished for their backstabbery by the loss of 17 seats. I hope the back room boys like Mark Arbib and Bill Shorten are pulled back into the same back room and given a wedgie. (I can't be sure, of course, that other voters have had qualms about Labor for the same reasons. There are some troglodytes even in an advanced Western democracy who oppose Gillard's leadership because of her gender, those who believe that an unmarried person without children cannot understand the problems of Australian families, and the religious right who oppose her for being an atheist and/or for "living in sin".) Still, I like to believe the Rudd factor was the most important.

At the time of Kevin Rudd's victory in 2007, the swing in Labor's favour was so great that psephologists called it a "two-election swing", which meant that the next election was Labor's to lose. And true enough, they lost it. I guess they could still crawl back into government by bribing two independents, but then it'd be official: Julia Gillard as Australia's first female lame-duck Prime Minister.

[See this hilarious Taiwanese spoof on the Australian election.]

Australia now follows the UK into the new era of hung parliaments and coalition governments. India moved into this era in 1989. 1984 was the last time the Indian electorate delivered an outright majority to a single political party. European democracies have seen coalition governments for decades. I think messy as they are, coalition governments more truly represent the views of a diverse society. They're complex and unwieldy, but ultimately fairer.

The Americans seem to have sidestepped the need for coalition governments by splitting the power of the State three ways - into an independently elected executive (the President), independently elected legislative bodies (the House of Representatives and the Senate) and a judiciary that although subject to appointments by the administration of the day, acts like a capacitor in an electrical circuit by slowly absorbing and discharging right- and left-wing constituents over the course of many administrations. Westminster-style democracies like Australia, the UK and India, in contrast, have the executive and legislative arms joined at the hip. The government is formed by the majority party in parliament. Hence the only way for the State to reflect the diversity of its polity is to elect a hung parliament with no single party gaining an outright majority. Coalition governments are then inevitable.

From a historical context, I think the world is therefore progressing. There is greater accommodation of diversity, and our democratic institutions are changing to reflect this.