The brutal gang-rape of a young woman in a moving bus in Delhi has provoked huge amount of public outrage and protests all over the country. Also, the ineffective and unresponsive state of the internal security apparatus in the country has come under attack from various quarters.

Naturally, there has been an increase in demands for police reforms in order to boost up domestic security. This typical reaction that has followed the recent incident of violence, however, is merely symptomatic of several similar cases involving the breach of basic security of citizens. Still, the state of domestic security in the country has seen absolutely no improvement despite mounting public pressure after each case of crime hits national headlines.

The question that naturally arises then is, why is the public security establishment in India almost totally unresponsive to loud cries from citizens? That is, except for the ad-hoc measures that immediately follow public protests after cases of brutal violence.

Could economics possibly explain this sad state of domestic affairs? Absolutely. The almost complete lack of accountability of the security establishment to public demands provides a classic example of how institutions that derive their authority merely through coercion possess few incentives (if any) to serve the needs of their customers, let alone be accountable to them in any meaningful way.

Essentially, the security establishment in India exists in a vacuum without a market with competing players. In other words, security under the present scenario is not a service exchanged in the open market between competing producers and consumers but one that exists aloof from the market mechanism that assures accountability.

The obvious objection is that security is in its basic character a “public good” that the market would fail to provide. While the answer to this objection will require a much larger debate, especially when even clearly marketable commodities that can be provided by private producers are still under government control in a country like India, it is still worth trying to experiment with private security agencies at the level of domestic security.

Such a step would, at the very least, make sure that agencies in-charge of domestic security would be accountable to customers who will have the choice to switch between competing security service providers – something that citizens today lack faced with a single security agency that is hardly accountable to citizens.

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Prashanth Perumal

Prashanth has been writing for CRI as a Student Intern since July 2012 concentrating mainly on economic issues. He obtained his BA in History in 2011, before moving on to graduate from the London School of Economics majoring in Economic History. Apart from being an avid autodidact and a follower of the Austrian School of Economics, he has also penned his own book: "The Political Economy of Spontaneous Order". His other interests include the study of Investing and Philosophy.

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