The Secretary of FTI, Arvind Ilamaran, recently wrote the following article in Freedom First.
Corruption – the most successful service industry in India
Those facilitators who form the crux of the State are the primary players in this ever continuing conundrum. But is it right to say that the fire of corruption is kept alight fuelled by the greed of the powerful alone? We have always seen corruption to be a negative phenomenon with respect to a common man, but is it so? When a whole nation is professedly against the notion of corruption how does it manage to flourish? It is a natural law that, for something to continuously survive, its preconditions need to exist.
What Makes Corruption Survive?
So, what are the preconditions of corruption? A benefactor, a beneficiary and a benefit. Benefit or the bribe can be of monetary or non-monetary form. Conventional wisdom says that the benefactors are the public and the beneficiaries are bureaucrats, politicians and other State agents (police, judiciary etc.). People could have stopped this malice at any point of time by simply not being the benefactors for, only in very few cases is money made to be forcibly paid under physical threat. In other words if you see the act of bribery as an act of voluntary economic transaction, we realize that bribe is one of the goods being exchanged for a certain service offered by the beneficiaries. From this perspective the beneficiaries are the State agents who offer a speedy and efficient public service, which they should have otherwise provided without the need of any bribe.
The administrative machine of our State is so complex that getting quick service is actually a privilege. And this privilege comes at a certain cost in the form of bribe. One cannot deny that if bribery were to be totally abolished and if every State agent acted according to the word of the law, people would not get quick service keeping in mind the plethora of procedures, regulations etc. imposed by the State on the people. The disharmony between economic, social and political development in the nation is the primary reason for this scenario. A common man today cannot stand in line for weeks and run from one office to another to get signatures from tens of people to get his job done. The world is moving very fast and the Indian economy has become fast enough to compete at a global level. But the lack of innovation and improvement in administrative service is costing us dearly and forms the foundations of corruption.
Corruption – An Issue of Demand and Supply
The reason why corruption will not disappear by enacting Lokpal or to be more abstract, by checking the actions of State agents is because in economic terms, this is nothing but supply regulation. That is, there is a demand in the social market for goods and efficient governance. This demand is catered to by officials who know the loopholes of the laws and regulations for which bribe is the fee. In actuality, this extra service being offered by the officials or politicians is beyond their job description for if they acted as required by rules, such a speedy response to public demand would be impossible. By regulating officers, we are regulating supply while the demand in the form of a need of good governance always exists. What we do not realize is that the economy always finds a way to supply a demand. If one mode of supply is depleted another is devised. The same will happen to corruption in India as well. By regulating officials, we are providing more incentives for other interest groups and interest-vested individuals to take advantage of loopholes in the laws of the land.
Need for Quality Governance
Quality governance is the demand. Public needs it, officials provide it and bribe is the price. This tenet when not understood leads to the misconceived perception that those who take the bribe stand more to gain from those who give the bribe. But even if punishment is enforced on those who give bribe, we are again meddling with the consumer base without effectively doing anything to diminish the nature of demand. The reason why I previously spoke of disparity between economic, social and political growth is that the Indian public has been a very active participant in the economic growth of the country thereby influencing the supply-demand mechanism and institutions which cater to these mechanisms to suit the needs of society.
Take for example any industry where people are active participants such as telecommunication, banking, e-shopping etc, the direct interaction between buyers and consumers results in change of price structure, commodity availability and catering to changing demands in an ever innovative way profiting both parties. But in the case of governance, we have two issues, firstly the role of government itself and secondly the archaic administrative apparatus of the nation. I shall not dwell on the former for it is an argument for ‘limited government’ and needs an elaborate discourse but as for the latter, in our nation, government sets the platform for all functions, be it primary, secondary or auxiliary. The political development in India is greatly stunted due to lack of active participation by civil society primarily during elections and almost nil thereafter. What this implies is that the changing demands of the people go unattended due to a lack of voice to ask for it. Voting is a quasi-active participation due to its ephemeral nature.
During elections, we exchange vote for promise of good governance. Note that vote is exchanged for merely a promise of good governance and not good governance itself. Whether someone after getting elected to power is able to keep the promise is one issue but what happens when s/he does not? In that case another party claims to provide the same service, but the bottom line is that voting doesn’t ensure good governance. Why? Anyone you elect in today’s scenario doesn’t have public service as their agenda and quality governance is not their vision. They also know that with the limited alternatives we have politically, even if they get defeated, next time they will get power the time after that. This becomes a strategic Schelling Point* among the political players and finally people end up losers. The only way to ensure good governance is by active participation by those creating the demand for it – the people.
People’s Participation – the Only Solution
By avoiding active participation in politics, we forego the only mechanism (political power) we have to bring about an institutional change required for good governance. By foregoing that, we try to satisfy the need for good governance by buying it from those who sell it (bureaucrats and politicians) at a certain price (bribe) depending upon the market value of that service. In essence, we have created the largest service sector in Indian market – only it lacks legitimacy. That’s why Gurucharan Das made the famous claim that the only way to defeat corruption is by legitimizing bribery! [Sanjeev: I entirely disagree with this claim]
For the above reasons, Lokpal is a waste of time and energy and the only way to defeat this national disease is by active participation in politics. If you want the change, demand it, fight for it and may be you shall get it. I joined Freedom Team of India to make my voice heard, to fight for the quality governance I deserve. Depending upon your conviction join any political group or start your own but just remember that battles are not won by standing at the sidelines.
* [Schelling point is “that which gives a group of like-minded individuals their common purpose.”]
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