The issue of corruption will not go away. Not that corruption itself is news, but the serial scams and scandals that have been exposed over the last six months have put the Indian polity in a crisis. India?s reputation abroad, so high until August last year, is now sinking lower. The media, which used to celebrate India?FT, Economist, WSJ?are all expressing deep doubts about the dysfunctionality of the country.
Now the exasperation has spread to the domestic constituency. This is more due to the slow response of the Cabinet to the problems than anything else. Justice delayed is justice denied. Hence, the large popular support for Anna Hazare?s campaign. It is like the campaigns in Egypt and Tunisia, driven by the new media, which are second nature for the young people to use.
That said, it is remarkable that the entire faith of the campaign has been invested in the Lokpal Bill. The idea that the cure for corruption is a tougher Bill than the one put forward by the government is rather na?ve. It is not that an Ombudsman will not help but it is hardly the cure-all that people claim. The experience of official institutions and its leaders as anti-corruption devices that we have is dismal; just remember the CVC fiasco. Nor does direct action by a dedicated idealist such as Anna Hazare always prove effective. After all, he had a campaign against Sharad Pawar and he is still there, larger than life.
The problem is deep, multi-faceted and not likely to yield to just one institutional solution. India has a weak record in creating and maintaining institutions that are truly free off political contamination. The structure of the government with its hydra-headed set of regulations makes it easy to collect rent for whoever is in a pivotal position to grant, deny or delay a permission or hand out a form.
Kaushik Basu, the chief economic advisor, has made an interesting intervention in this respect. He has focused on the symmetry between the giver and taker of bribes as one of the issues to be tackled. He would go light on the bribe giver if he exposes the bribe taker and then punish the latter.
This is a promising start, but as Kaushik Basu, who is a good theorist, will realise, the game is not so simple. The bribe giver and bribe taker are not playing prisoner?s dilemma, which rewards collusion over individual rationality. There is an ex-ante power asymmetry between the two. The bribe giver knows that if he tries to expose the bribe taker, he may be punished himself since the laws are made by the bribe taker. Every whistle-blower knows that the system he is trying to expose can strike him down since all power and legitimacy is with the corrupt being exposed.
So, the bribe giver faces a series of interconnected choices. First is to give the bribe or not. The costs of not giving a bribe is to lose out on whatever he wants or suffer long delays and harassment before he gets it. Most will give the bribe and be done with it. Having given the bribe, he has the choice of exposing the bribe taker or staying silent. Here again, the costs are asymmetric. No costs to keeping quiet except in the small probability case of being caught giving the bribe. But exposing the bribe taker has also more than one possible outcomes. The bribe taker may be punished but then the bribe giver is a marked man for other potential bribe demanders who control other ?goodies? he may want in the future. There is also a possibility that the system will protect its own and acquit the bribe taker.
Thus, to fight corruption, there has to be someone who can bolster the lower strength of the bribe giver against the higher clout of the bribe taker, so that each of the possible outcomes will cost the bribe taker more than the bribe giver. It may be that the Lokpal is one such person. If so, he has to have the power to be approached directly and secretly.
But even more than this we need to simplify the regulations and rules that generate the opportunities for rent-seeking. Thus, I gather you have to obtain permission from 49 authorities to open a school in Delhi. Do we even know who these 49 institutions are and why they are there? The first need is to make all the regulations with all the various stages at which permissions are needed and the persons responsible transparent. This is an enormous task, since many of the rules are antiquated. But it will be only if we know where the poison can be generated that allows corruption to flourish that we can begin to tackle it.
The author is a Labour peer and a prominent economist