Explaining our traffic chaos

India is fraught with poor traffic governance. Although corruption is popularly cited as a reason for that, here are some fundamental economic theories that explain traffic-violating behaviour.

Under-priced fine rates

Economic theory suggests that demand for a good rises when its price is low. Consequently, people commit numerous traffic violations since the price — the fine — for such violations is low.

To explain, the current fine for violating a stop light is Rs 100 in Mumbai. It’s a common experience that one gets off scot-free by paying less than Rs 100, benefiting both the violator and the cop. In other words, “theoretically”, the violator by sliding in, say, Rs 50 as an unaccounted sum can get away with the violation.

On the other hand, if the fine was Rs 7,250 and imprisonment, then the underhand amount to be paid would also increase accordingly to, say, at least Rs 500 or Rs 600. Disregarding the fact the amount is not accounted for, the payment is high enough to deter violations, at least for those who cannot afford it.

The same logic applies to vehicles parked alongside busy roads, waiting on the signal on the wrong side of the lane, or plying through wrong way. Overall, economic rationality would suggest that if the fine rates for traffic violations are increased, the incentive to obey rules would be much higher.

After all, such fines are only applied to the violators. Since mild punishments do not seem to work, there needs to be a more severe alternative. Also, hefty fines can modestly add to the revenue stream of the government budget, which, at the national level, is anyways at concerning levels.

Herd behaviour

Another possible explanation for traffic violations is based on a behavioural theory in economics called the “herd effect” — a synchronized unrehearsed group act. For example, if a vehicle takes the lead to wait for a green light on the wrong side of the road, then more vehicles follow suit. Such actions are not planned but transpire dynamically, which ultimately creates a collective chaos. In such cases, it is hard to single out one violator and punish him or her.

One of the potential solutions is to penalise the lead violator with higher than normal fines, say, five times the original fine amount. What this does is to disincentivise a vehicle from taking a violation lead — the perfect recipe to minimise or eliminate traffic violations. Even from an implementation perspective, catching hold of the first vehicle is much easier for the cops!

Market distortions

Market-based theories cite the inefficiencies created by labour unions, which typically distort demand and supply. The role of unions is quite pronounced in explaining traffic disobedience in India. Labour unions are extremely important to protect and uphold the rights of union members so that workers are not exploited. But it works adversely when the union members’ rights are out of sync with their responsibilities. Unfortunately, in India, many a times, traffic violations are a victim of the latter.

If left to market forces of demand and supply, those who commit or “supply” crimes would have to pay a price called fine. But practically, in India, it is harder to enforce these rules on government-owned vehicles or city buses, drivers of which are a part of trade unions. Such crimes, often times, deliberately get unnoticed because of the fear of a state or nation-wide strike by union members. At the same time, because of the potential protection from labour unions (regardless of the nature of the violation), drivers get less incentivised to adhere to rules.

So what is the solution? One of the solutions is to ensure that union members who commit such errors be debarred from being a part of any union, in addition to the usual punishments. This should be particularly enforced when it involves physical and material damage to others.

A point-based system for other minor violations can also be a potential solution. Once the accumulated points cross a critical threshold, the violators should be debarred from the union. These measures would ensure that union members take responsibility for their actions. In general, for every subsequent violation, the respective fines should be doubled for violators.

Unless strict enforcement measures are put in place, regardless of how much government spends on building new roads or infrastructure, traffic violations would only continue to be the way it is.

In fact, more roads would only entail a larger number of violations, and would not serve to be a solution for our transport bottlenecks! There is nothing like the fear of strict punishment to tame people’s behaviour and unfortunately, it looks like it is the need of the hour to counter traffic violations in India.

COMMENT NOW