Sociological Analysis of Nepotism

SOCIETY/ ETHICS

Topic: General Studies 1,4:

• Indian Society
• Ethics and Human Interface: Essence, determinants and consequences of Ethics in-human actions; 

Sociological Analysis of Nepotism

Context: Sushant Singh Rajput Case and the issue of Nepotism in Bollywood

What is Nepotism?

• Nepotism is favoritism that is granted to relatives in various fields, including business, politics, entertainment, sports, religion and other activities. 
• In simple words, Nepotism is favoritism based on kinship
• The term originated with the assignment of nephews to important positions by Catholic popes and bishops

Consequences of Nepotism

• Unfair Competition: Those with family connections don’t face the same level of competition as outsiders, exactly as domestic companies face much less competition when there are import barriers. 
• Imposes Individual and wider social cost: Breaking in is much harder for an outsider and those who have the talent may never get the opportunity to showcase it. Therefore, there is a loss of potential output or value to society because of the resulting misallocation of talent.
• Inefficiency: There is comprehensive evidence that family firms are often beset by inefficiency, with bad management affecting the productivity of the entire organisation. 
• Hinders Productivity: There are further indirect negative effects of nepotism on efficiency. If it is known that rewards depend on connections and not on effort and initiative, it would divert people’s efforts away from productive work to networking and lobbying.

Why aren’t there some corrective forces at work that would chip away at the inefficiencies of nepotism?

There are two main reasons why this may not happen.

First, there are often explicit barriers to competition. 

• This barrier gives incumbent groups monopoly power and enables inefficient practices such as nepotism to flourish. 
• Examples of such entry barriers include economic institutions such as 
  • Monopolies, syndicates and cartels; 
  • Social institutions such as the caste system and patriarchy; 
  • Policies that prevent the inflow of workers, goods and services from outside, such as anti-immigration laws and protectionism. 
• Here, potential competitors are explicitly excluded and, therefore, insiders get undue advantage because of restricted competition
• Because of restricted competition, there is a loss to society from lack of access to the best technologies, products, skills and services.

2. Challenges of Subjectivity

• Second, a less open and subtle channel of nepotism has to do with the fact that in certain domains, it is not easy to come up with an objective measure of quality. 
• The ordinary consumer can separate the good from the bad and the marketplace would tend to weed out the bad. 
• But for many professions, quality or performance is not that visible or cannot be readily and independently verified.
• In the case of research, for example, evaluation of quality is based on peer-review. By their very nature, these opinions are based on information and judgement that outsiders cannot hold up to scrutiny. 
• Therefore, to the extent the opinions of experts, referrals, reputation, endorsements, and networks are necessary to certify quality in any field, they become a potential breeding ground for nepotism.

Way Forward

• Nepotism is just one of the symptoms of a much of broader issue — the lack of mobility.
• Mobility can be enhanced when people are made aware of such discrimination exiting in the society. Education with right set of values can help increase this awareness & thus strive towards curbing Nepotism