In economics, we often talk about efficiency and optimization – but this time, let's start with a lesser-mentioned but equally important perspective: the "default effect" in behavioral economics.
This effect refers to the tendency of individuals to stay as they are or to choose the default option when faced with a choice.
Now, you may ask, what does this have to do with the delay in the operation of the MRT due to Indian visa restrictions?
First, let's map this concept to policymakers.
They may have been influenced by the tacit effect in the Indian government's decision to restrict visas.
For a long time, caution about the issuance of visas for foreign skilled workers may have become a default option due to concerns about national security and local employment.
Even in the face of the urgent need for foreign experts in metro projects, this default decision-making tendency may have led to policymakers failing to adjust their strategies in a timely manner, leading to delays in metro projects.
Further, this tacit effect is not just a problem for policymakers.
Imagine if India's engineering teams and management were similarly affected, they might be more inclined to wait for foreign experts who have already applied, rather than looking for possible alternative solutions or speeding up the training of local technicians.
This inertia in decision-making can lead to a decrease in the efficiency of the entire project.
Now, let's dig a little deeper. The default effect is often associated with information asymmetry and cognitive biases.
In this case, the Indian government and the MTR company may lack sufficient information to fully assess the impact of visa restrictions on the project, or may have underestimated the cost of inaction due to preconceived notions.
This cognitive bias, combined with the default effect, creates a strong inertia that makes it difficult for the project to adapt to rapidly changing circumstances.
So, considering that the first batch of 21 technicians were eventually granted visas, can we expect the situation to improve?
This may be a positive sign, but it may also be a response to the current crisis, rather than a shift in long-term strategy.
The real question is whether India will be able to overcome the tacit effect and build a policy system that is more flexible and responsive to emergencies.
Finally, I would like to ask a seemingly unrelated question: if the principles of behavioral economics are widely applied to policymaking, will we be able to effectively prevent similar project delays?
Given the experience of the Indian Metro project, policymakers may be more frequently assessed and adjusted to adapt to rapidly changing circumstances if policymakers are aware of the impact of the tacit effect and take steps to reduce its impact on decision-making.
This may not only reduce project delays, but also increase the competitiveness of the country as a whole in the international arena.
Of course, this requires an in-depth understanding and refinement of the policymaking process, but it provides us with a solution that is different from the traditional economic lens to deal with the complex and ever-changing modern world.
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