POLITICAL BOND-MEDIATED TECHNOLOGY & POLICY HEDGES

POLITICAL BOND-MEDIATED TECHNOLOGY & POLICY HEDGES

(plus Political Support for NSI Monetization!)

 


Prasad Rao, Director

AltKuznets Sustainability Advisors Pvt Ltd

director@altkuznetsadvisors.com

 

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It is often the case that a Sector witnesses a technological revolution in a short period of time, and those innovations and technologies are promoted through multiple Design & Policy alternatives. Those Policy alternatives[1] compete with each other not only on basis Cause, Scale, Efficiency and Returns, but also their compatibility with Political regimes that may or may not eventually favour the technologies for reasons the social, technological & policy preferences of the People, and the Equity-Efficiency:Risk-Return imbalance. Consequently, certain innovative technologies and associated Designs & Policies might be benched across years, even decades until the Political regime switches. Further, it could so happen under a laissez faire that despite a long bench, Technologies might not find favour due social frictions, mis-presumed economic policies, or unanticipated developments over those ‘Roost/Bake years’. The fact that Technological progress is ever-present and pervasive, implies such ‘long Schumpeterian Benches’ are quite likely, for which reason, it is necessary to anticipate them with a far-sighted strategy that minimizes the cost of technology adoption. The construct of a ‘Political Bond’ that operates in the opposite of the NGDP Bond, and where Political Parties associate publicly toward a larger Sovereign Cause, and yet compete privately toward a future political regime, may be leveraged to hedge market risks for Technologies associated with changing Political regimes.

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