A Nash equilibrium in Sindh politics

There is a deal between the PPP and the MQM that could potentially end the dysfunction that defines Karachi and Sindh politics. The deal would benefit both parties, energise their base of supporters and create a more cooperative environment that the province as a whole would benefit from. There is just one problem with it: it could well mean the effective end of the careers of the current crop of Sindh PPP politicians.

At the heart of the dispute between the MQM and the PPP is the manner in which Karachi and Hyderabad are governed. The MQM wants elected local governments with fiscal and administrative autonomy: local politicians, funded by local taxpayers, solving local problems. A deal that gives the MQM the local government system it wants and the PPP the kind of budget concessions that would ensure that Karachi does not keep its wealth to itself is the most logical way to solve this dispute. But the parties cannot seem to come to an agreement.

The PPP leadership cites many reasons — some legitimate, some bogus — for why it believes the system of local government the MQM wants is a bad idea. But it never states its real reason: if the PPP allows elected local governments in Sindh, the iron grip of the aristocrats that currently dominate the ranks of the party’s elected officials will be broken. After all, it only takes about 300 or so votes to win a union council seat. Anybody, no matter how poor they are, can conceivably compete for that. Of course, a union council seat unto itself has no real power, but it is conceivable that a promising new politician could work his/her way up from those lowly ranks to more substantive positions like a seat on the district council. The more talented could even hope to win a districtnazim seat or even an MPA election.

In effect, elected local governments lower the barriers to entry for positions of political influence, something that the patronage-focused aristocratic politicians in the PPP view as a threat to their power. They cannot allow this to happen.

It is, of course, easy to vilify these politicians for holding the entire province hostage in their bid to cling to power, but their behaviour is entirely rational. After all, if they have a veto on the very institutional reforms that would do away with their own political influence, why would they not exercise it? The key to end this logjam is to break their veto power.

The only entity that has the ability to do so is the national PPP leadership. There are certainly plenty of incentives for the PPP’s leadership to want change in Sindh. The party is in desperate need of fresh blood in its ranks, as well as replacing the current moribund group of MPAs with some people who are actually interested in governing. That, after all, is the only way it will get its national profile back, particularly among voters in Punjab. So why not go for it?

It all comes back to game theory, specifically the Prisoners’ Dilemma. The optimal outcome would be for National PPP to stop colluding with the Sindh PPP and trust that the voters will back its new strategy and new candidates. However, the voters do not know who these new candidates are and may choose to stick to the faces they know. Meanwhile, National PPP leadership knows that voters may not like their new candidates and so they stick to the current Sindh PPP leadership as well.

It is a perfect Prisoners’ Dilemma. And as students of game theory already know, the problem with the Prisoners’ Dilemma is that it is in a Nash equilibrium, meaning that neither party has any incentive to change their existing strategy. That, unfortunately, is where Sindh politics has been stuck essentially since 2008.

A Nash equilibrium, of course, is not unbreakable. But it will require hard work and risk-accepting behaviour, something that the national PPP leadership has not shown an appetite for since December 27, 2007.

Published in The Express Tribune, January 16th, 2015

Farooq Tirmizi

CEO, Elphinstone

Farooq Tirmizi is the founder and CEO of Elphinstone, the financial services firm that operates SmartRupee.

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