'Bad economics can kill'

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It is not long since Manju Nathan was murdered, apparently for tangling with the black market in gasoline in India. Writing in Indian Express today, Ila Patnaik blames a regulatory environment for encouraging crime:

The murder is a wake-up call for the government to change policies in the petroleum sector. The government’s decision to continue with the policy of subsidising kerosene, despite knowing fully well that kerosene is being used for widespread adulteration of diesel, is irresponsible and callous. It is well understood that the structure of economic incentives is a far stronger force than policing. It is easy to blame the law and order situation for the murder. But the real blame lies with the petroleum price policy that created incentives for adulteration.

Memorials to Manju Nathan are appearing around the internet, for example here and here. Meanwhile, there is little doubt that excessive regulation does shift people into the black and grey markets - read our discussion here.

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