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Monday, June 25, 2018

When AAP meets IOU

Even if AAP gets all-India traction, index of opposition unity can ensure a very different story on seats

Written by Surjit S Bhalla | Updated: January 24, 2014 8:57:51 am
 Even before the presence of the Aam Aadmi Party (AAP), the winds of fundamental change — both economic and political — were sweeping across India. (Express Archive) Even before the presence of the Aam Aadmi Party (AAP), the winds of fundamental change — both economic and political — were sweeping across India. (Express Archive)

Lok Sabha Election 2014 is likely to be the most important election ever held in India, and likely to remain so till India completes 100 years of Independence. This is so for various reasons. Even before the presence of the Aam Aadmi Party (AAP), the winds of fundamental change — both economic and political — were sweeping across India.

For at least the last decade and a half, the most important parameter in elections has been the performance of the incumbent party in elections. This performance has consisted, mainly, of two criteria; first, did the economy perform well during the tenure of the incumbent government; and second, was the leader (chief minister or prime minister) perceived to be corrupt or not. Obviously, there have been detours around this theme, and most importantly in the 2004 Lok Sabha elections when, despite good performance, the NDA lost.

If proportional representation was in existence today, the AAP would gain near identical seats to the BJP and the Congress. If proportional representation was in existence today, the AAP would gain near identical seats to the BJP and the Congress.

The road to Election 2014 has now become curved with the advent and Delhi success of the AAP. With the AAP’s intention to contest at least 300 seats (maybe even all 543) in the forthcoming Lok Sabha elections, the Congress and the BJP appear to be a worried lot. This discomfort stems from the huge surprise “victory” of the AAP in the recent Delhi elections, where the Congress suffered a massive thrashing by the jhadoo. It is not that the AAP won, but that everybody else lost; hence, victory is in quotes. Ultimately, the question on everybody’s mind is, “How many seats will the Aam Aadmi Party win in 2014?”

Regardless of the seats it might win, the AAP might hurt either or both of the major parties or alliances. The fact remains that the AAP is an important force in the forthcoming elections, especially in terms of the vote share it will be able to obtain. Its overall effect is analysed in this first of two articles; vote shares in the first part, and the all-important seat “estimates” on Saturday (January 25). It bears emphasis that the estimates are not forecasts; these estimates are not based on opinions or opinion polls, but rather on assumptions generated by India’s electoral history.

Conventional analysis looks at swings in vote shares. A near equivalent way of looking at vote swings is via vote “give-ups”. The vote for a new entrant like the AAP has to come from the existing pool of voters; from an existing Congress, BJP, regional party or independent voter. “Existing” here is defined as the 2009 election. The “give-up” of vote share is the percentage of vote share lost by a party with respect to its previous election performance. For example, if the Congress obtained 40 per cent of the vote in a constituency in 2009, then a give-up of 40 per cent to the AAP implies that in that constituency, the Congress will obtain only 60 per cent of the vote, that is, 24 percentage points, and the AAP will gain the remaining 16 percentage points from the Congress.

All analysts are constrained by history — there is no parallel to the unique formation of the AAP. There have been instances of new political parties pulling off surprising victories (for example, N.T. Rama Rao in Andhra Pradesh in 1983); however, hardly any regional party has gone on to make an impact at the national level.

What give-up can we expect from either the Congress or the BJP to the AAP? And will both be the same? What about the possibility that there will be give-up from an AAP voter to a BJP voter — the Modi effect? Recall that the Delhi opinion polls had suggested that at least a third of AAP voters might vote for Modi.

Looking at past assembly elections in terms of give-ups of the Congress party, Arvind Kejriwal’s sweeping victory over the Congress is one of the highest on record, with an average give-up of 39 per cent, that is, out of every 100 Congress 2008 voters, 38 voted for AAP in 2013. In case of the BJP, the give-up was only nine out of 100. In case of the remainder (BSP and independents), the give-up was 50 out of 100. Historically speaking, in terms of assembly elections, the Delhi Congress give-up was one of the worst in history, the worst being the 60 per cent give-up to Asom Gana Parishad in the 1985 Assam elections. For Lok Sabha elections, the worst Congress give-up was in 1996, when, on average, 24 out of 100 Congress voters voted for other parties. (Note that, in the 1977 debacle, the Congress give-up average was 19 per cent.)

This provides us with a historical basis for analysing AAP possibilities in 2014. The attempt is to construct scenarios that guarantee the AAP the largest possible share of theoretical votes. Towards this end, the following assumptions are made. The Congress gives up a minimum of 20 and a maximum of 40 per cent of the vote share obtained in the 2009 election. If the Congress did not contest a seat in 2009, the AAP obtains zero votes from the Congress in that constituency; if it obtained 60 per cent of the vote share (as it did in Delhi’s Chandni Chowk (CC) constituency), and the assumed Congress give-up is 40 per cent, then the AAP obtains 24 per cent of the vote. In addition, in this base estimation, the AAP obtains 10 per cent of the BJP vote. In CC, the BJP obtained 34 per cent in 2009, so the AAP’s vote share goes up to 27.4 per cent; finally, the independents and third parties yield 50 per cent to the AAP; so the vote share of the three major parties (the Congress, BJP and AAP) in CC is 36, 30.6, and 30.4, respectively. The surprising conclusion, in this scenario (replica of the Delhi assembly 2013 give-ups), the Congress wins in Chandni Chowk!

Of course, different give-ups will yield different results; in the above example, if the Congress gave up 45 per cent of its vote share, and the BJP 15 per cent, the AAP would win in Chandni Chowk. These variations are experimented with in12 different simulations of vote shares. Seven of these simulations have the following range of assumptions — the Congress give-up: 30 to 35 per cent; the BJP give-up: 0 to 10 per cent; and other parties give up an average of 20 per cent.

The results are revealing. The average vote shares obtained by the three parties are all very close to each other. The chart reports the national vote shares of the two major parties for all elections since 1989. However, and this is where AAP votes in 2014 may meet electoral reality, there is virtually no meaningful relationship between the vote shares and the seats obtained by each party. In 1989, the Congress obtained one of its largest vote shares (37.7 per cent), and yet obtained fewer seats than in 2009 (vote share of 26.1 per cent!). As is well known, this lack of a relationship is due to two factors — most importantly, the first-past-the-post electoral system and coalition politics. The latter may have made us forget the Lahiri-Roy formulation of IOU (Index of Opposition Unity) over the last two decades. By making it a three-party/ coalition fight, the AAP’s entry brings back IOUs with a vengeance.

An alternative electoral system prevails in many European countries and in some developing countries, for example, Brazil. This is the proportional voting system, where seats obtained are proportional to the vote obtained. If this system had prevailed in India, then in 1999, the Congress would have formed the government. (As it happened, the Congress got its lowest ever seats — 114 — in 1999).

This provides a perspective on the “projected” vote shares for the three parties in 2014, and the seats they will obtain. The projections suggest that it will be a very close fight, given our assumptions, for votes. On average, the AAP obtains the lowest at 17.7 per cent, the Congress 18.8 per cent, and BJP the highest, at 19.1 per cent. So if proportional representation was in existence today, the AAP would gain near identical seats to the BJP and the Congress. But with the first-past-the-post system — wait till Saturday’s article. Hint: IOU makes a big dent to common assumptions about the AAP’s seat popularity.

Surjit S. Bhalla is chairman of Oxus Investments and a senior advisor to Zyfin. This is the first of two articles based
on work with Prasanthi Ramakrishnan and Sriramjee Singh

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