A question that repeatedly comes up when analysing the stunning majority by the BJP in the 2019 elections is how did Modi win when the economy was under pressure. The usual explanation is that the data might be wrong, or that his personality overcomes all. Yet there may be a more convincing explanation provided by behavioural economics. The pro-Modi wave could be the result of what is called the Prospect Theory, which has also been associated with Brexit and Americans electing Trump.

The theory — for which Amos Tversky and Daniel Kahneman won Nobel prize in Economics in 2001 — states that individual decisions are based on perceived gains rather than perceived losses. People often gamble to avoid guaranteed losses, but play it safe with guaranteed gains. Take a case where a person has to choose between two options. In one, she is guaranteed to win ₹50 while in the other she can either win ₹100 or nothing at all. Most people would choose the first option. But when the choice is between two types of losses, most people prefer the risky option. Take a case where the choice set is that of losing ₹50 for sure, or a risky bet with equal probability of losing nothing or losing double (₹100). People are usually more willing to take the risk and opt for the gamble. Depending on whether the stakes are conceived as gains or as losses, people’s attitudes change towards risks and most prefer to gamble at times of loss.

This is relevant to understanding Modi’s win at a time of economic distress. The government has accepted after the election that growth rates were slowing down and the unemployment rate was at a 45-year high. While the representatives of the ruling dispensation did brush aside these figures, they did not campaign on a slogan of economic success. Instead, the sense of loss was strengthened by long complaints about the misrule of the past, going back to Jawaharlal Nehru. Past Prime Ministers who were commonly associated with national victories were not targeted. This was most striking in the case of Indira Gandhi, who was associated with the 1971 victory over Pakistan.

The sense of loss was further strengthened by a helpful opposition. The focus on the Rafale deal only intensified the sense of widespread corruption. The campaigns of several other once-important parties too pointed to all that was wrong across the country. In fact, the more they targeted Modi’s economic performance, the more depressing the narrative became.

Against this backdrop of a sense of loss, the Modi campaign provided all the elements of a gamble. It offered impossible returns. The original promise of acche din was upped further to making the impossible possible. This was best captured in the slogan Modi hai to mumkin hai . At a more general level, all sloganeering was shifted from issues to just a repeated chanting of his name. The name then becomes a large umbrella under which are a variety of impossible dreams, ranging from sending minorities (and some critics) to Pakistan to becoming a world power instantly. The returns of the gamble then become very high.

The vote against Modi was presented as a vote for Rahul Gandhi. The Congress leader emerged as a limited loss. He presented the more-of-the-same option, especially with his NYAY scheme, which was but a reworking of earlier Congress welfare schemes. He was clearly the less risky option.

True to the Prospect Theory, the voter went with the more risky choice at a time of widespread loss.

The writer is an Assistant Professor at the National Institute of Advanced Studies, IISc, Bengaluru

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