Scarcity creates corruption. Therefore, regulating availability is not the way to tackle it; that will only make things worse.

In our country, there is a massive deficit of many things that people want. Affordable houses, good schools and hospitals, water supply, waste management, and so on. This causes intense competition for what is available. Those who can bid high have a chance of gaining, and also those who can rig the bidding itself.

Housing is a very good example of this. To buy a house in any of our major cities now, you either need a lot of money, or some way to corner some land through the usual statecraft of our development authorities (BDA, DDA etc) or the government itself (G category being a good example).

If there were no scarcity, there would be no need for the dodgy stuff, and people would get the same things at much better rates. But scarcity is created deliberately by (a) limiting the amount of land available for housing through zoning, (b) cornering a big chunk of this through the planning bodies and their acquistion, and (c) private purchases – usually with inside information – by developers of whatever is left.

This is true in a lot of other fields too.

Every once in a while, the government will be forced by outcry to do something about this. The best thing would be to stop doing the dodgy things it does, but that would mean less money for crooked officials and netas, so they do something else. They try to ‘regulate’ things in the name of public interest.

Builders should put up low income housing too, unaided schools should admit kids for free, waste from illegal colonies should be treated in some other locality. These are all standard responses to massive public anger about non-delivery of outcomes.

None of this will work, because the ‘regulated’ entities don’t see this as fair. They see the regulation as nothing more than an effort by the government to pass on its responsibilities to private citizens, and blame all the failure on things like greed, inequality, etc.

Governments like this paradigm. It is easier to demonise the people who actually supply what the public want, than to provide these same public goods through better governance or even welfare. It also takes the spotlight away from the government’s failures, and focuses attention on someone else.

There’s another reason governments like this. Even reasonably clean governments like this, sadly. West Bengal is a good example (or at least it initially was). They systematically disincentivised the creation of both public and private goods. And they told us all along that it was the fault of the capitalists. Initially they were blamed for not sharing enough, and later they were blamed not investing in the state at all.

It’s always someone else’s fault.