Explained: The right way to fight graft

By: | Published: August 22, 2018 2:23 AM

Anti-graft efforts can either exploit the tension built by providing for punishment for the bribe-receiver, but not the giver, or focus on proactive deterrence

corruption, graftCorruption is known to harm development processes. (Reuters)

One of the Bills passed by the Parliament in this monsoon session is a new anti-corruption Bill which has features punishment for bribe-givers, speedy trial of cases, shielding of government officers from prosecution by making prior approval from competent authority mandatory for investigating agencies, and so forth.

It is important to understand the rationale behind punishing bribe-givers, particularly when a former chief economic adviser to the Union government, Kaushik Basu, had in fact floated just the opposite idea, i.e., of making bribe-giving legal. His idea was that if we make bribe-giving legal, it would create some tension between both parties to a transaction as bribe-receiving would still be illegal. This tension could be exploited by incentivising a bribe-giver to spill the beans. This would make a bribe-receiver fearful, thus bringing down the incidence of bribery. Of course, his suggestion was only for a class of bribes called “harassment bribes”—given by people to get what they are legally entitled to. For example, paying bribes for seeking tax refund, for availing benefits under government schemes that a person is entitled do, etc. But even for non-harassment bribes, Basu supported the same logic—creating and exploiting the tension between the two parties. In his worldview, the design of the scheme itself would create deterrence, rather than building deterrence through detection and punishment by the enforcement agencies. This is not say that the enforcement agency doesn’t have a role in Basu’s worldview. It does, in spotting bribery where parties engage repeatedly and can potentially settle into cosy alliances of bribery.

Instead, what the legislators have chosen in the Bill is a different strategy: to make bribe giving punishable. By adopting this provision, the Bill seeks to discourage both parties from indulging in bribery. In this worldview, deterrence is to be built through pro-active detection and punishment by the enforcement agencies. Either of these strategies could offer a potential solution to the scourge of bribery, but each strategy has a different logic and implications. And, either strategy could be effective, if implemented well.

That the Modi government is serious about controlling corruption is evident from the fact that his government completes more than 80% of its term in office without having even a single proven case of corruption against it. Not too long ago, corruption and development were known to go hand-in-hand. The so called “speed” money was considered necessary to make files move in the government. Development projects were promoted not just for their own sake but also for “rent-seeking.” The Modi government has snapped this connect between development and corruption.

Corruption is known to harm development processes. The extent of this harm generally runs into several multiples of the amounts involved in corruption. Corruption generates black money that hurts an economy in two major ways: it blunts policy instruments of government and tends to make government policies ineffective, and, it deprives government of much-needed revenues for the provision of basic services to the people. Weak provisioning of basic services in turn lowers peoples’ confidence in their government and creates incentives for tax evasion as people seek to self-finance those basic services.
The Modi government has been able to pursue development for its own merit and has also been able to check corruption through cleaner administration.

But zero-tolerance policy against corruption is only one of the dimensions of good governance. Good governance is actually a much broader concept that not only means accountable and transparent government but also that government is responsive, participatory, efficient and effective. Good governance is as much about government’s own conduct as about various processes and methods it adopts in engaging with its citizens and businesses for identifying development challenges or opportunities and finding solutions or tapping opportunities. So, a road to good governance is a long one, and it can easily take several years to walk down that road. In this context, PM Modi’s comment that good governance (su-raaj) is the birth-right of every Indian and they should have it, is noteworthy for sure. But it is also reflective of the fact that it can take several years before every Indian can have access to good governance.

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