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Corruption and Development

December 1, 2010

There is so much about ‘Corruption’ and ‘Scams’ in the news nowadays. We wake up in the morning hearing about one new one and go to bed watching the latest debate with all the neo-intellectuals telling us how the problem is growing and how it is affecting our lives. The last two weeks have seen our Parliament virtually come to a grinding halt in trying to understand and to end this cancer, but asking the Government to form another needless committee which can endlessly debate this issue and come up with nothing substantial. Having worked in building local communities in controlling corrupt practices in public services affecting their lives, I would also like to add my two cents to the debate.

I am getting increasingly nervous at the current debate, not only because of the large amounts that are being spoken about, but more so because of the smaller amounts being ignored. Does this matter? Well, in my opinion it not only matters, but could possibly add up to unbelievable sums. The aggregate of a few rupees systematically siphoned off month after month in ongoing anti-poverty programs from millions of people does more damage to our system and to the confidence and morale of the ordinary citizenry than does one large scam. People not only begin to feel cynical and hopeless, but also tremendously incapacitated and impotent. They become mere spectators in the scheme of things and generally resign to what is happening. This leaves them powerless and takes away their strength to negotiate and to demand accountability.

I would like to begin my discussion on trying to understand what exactly does corruption mean? Corruption, defined as ‘the abuse of public power for private gain’ (World Bank, 1997), has existed for long. It encompasses unilateral abuses by government officials such as embezzlement and nepotism, as well as abuses linking public and private actors such as bribery, extortion, influence peddling, and fraud. Transparency International has downgraded India’s ranking from 84 to 87 this year and corruption has become one of the key stumbling blocks for the country’s progress. Though formal Institutional mechanisms of the state exist for fighting corruption, they have not been able to make a significant impact.

Being passionately connected to the development sector, I would like to focus on the dimension of Corruption and Development. Evidence confirms that corruption hurts the poor disproportionately and hinders efforts to achieve the Millennium Development Goals (MDGs) and human development by reducing access to social services and diverting resources away from investments in infrastructure, institutions and social services. It arises in both political and bureaucratic offices and can be petty or grand, organized or unorganized. In the political realm, it undermines democracy and good governance by subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and representation in policymaking. Corruption in the judiciary suspends the rule of law and corruption in public administration results in the unequal provision of services. More generally, it erodes the institutional capacity of the Government as procedures are disregarded, resources are siphoned off, and officials are hired or promoted without regard to performance. At the same time, it undermines the legitimacy of Government and such democratic values as trust and tolerance. It also undermines economic development by generating considerable distortions and inefficiency. In the private sector, it increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, an emerging consensus holds that the availability of bribes induces officials to contrive new rules and delays. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. It also generates economic distortions in the public sector by diverting public investment away from the social sector like education and health care into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal such dealings, thus further distorting investment. It also lowers compliance with construction, environmental, or other regulations, reduces the quality of Government services and infrastructure, and increases budgetary pressures on Government. These distortions deter investment and reduce economic growth.

The problem today looks so overwhelmingly large and all-pervasive that many wonder whether anti-corruption activities can actually make any significant impact. Any anti-corruption activity should begin with understanding the challenges that corruption poses and with thinking through a response very strategically. Having worked for the last many years in this sector with communities at the grassroots level, I feel that the metric for any anti-corruption work should go beyond one’s personal attitude towards corruption (merely measuring an experience that admits criminality) to that of the measures that support anti-corruption bodies and their work. One also needs to understand the system (whether Government, Non-Government or Private) from the point of view of how it should work (nominal) and how it really works (the actual).

One also needs to internalize that we need to fight this form of criminality not as a one-time event but fight it as long as it takes. We need to prepare ourselves for the pain of uprooting corruption, as any fight against corruption will necessarily mean enormous losses to many stakeholders and we need to brace ourselves to the forces that will prevent any anti-corruption work. The forces need not be actors in the political and administrative arenas alone; we need to understand that millions of ordinary citizens are also getting co-opted as stakeholders into the pecuniary gains that corruption brings. Keeping this understanding in mind and the reality as it exists today, I would recommend seven basic steps that will be necessary to create the environment to begin an organized attempt to fight this menace.

1. The determination to fight:
Any anti-corruption work starts with the determination of the system and its many players to fight it. Though ‘Political will’ can be fragile and volatile, it is still the prime mover. We only need to now look at states like Gujarat and Bihar where the determination of the men at the top has contributed significantly to the improvement at the ground level. States like Karnataka are also good examples of how easily corruption can grow and thrive due to the active indulgence of the politicians at the highest level.

2. Values on the Subject:
The law of the land, to a great extent, determines the values that are stated on this subject. We need to have laws that clearly define bribery, fraud and corruption with both evidentiary and procedural provisions. Apart from one’s own personal and professional values, the legal dimensions that prevail in a state can deeply influence behaviour. We need to be sensitive to the fact that any anti-corruption activity could end up being counterproductive if there is ambiguity in the law. Cynicism is indeed a societal value that can easily deter any such work, and clarity in the law, in terms of its definition and implementation, is very crucial in building public confidence. Attention should also be paid to enacting suitable laws and implementing in the right spirit in order to protect whistle blowers. Though India has recently enacted such laws, one needs to see if it will be effective in its implementation.

3. Systems & Procedure:
A lot of anti-corruption work suffer due the lack of a clearly defined plan or strategy. Knee jerk responses, though appearing popular in the short-term, could actually undermine processes in the long-term. Proper systems and procedures have to be laid down for enforcement, prevention and education. The Karnataka Lok Ayukta Act is a good example of how much attention needs to be given to this dimension of enforcement and prevention. Enforcement is an effective deterrent only when the agency has prosecution powers and this lacuna can further contribute to not just making a mockery of the entire agency and the system but in also eroding public confidence. One only needs to remember the recent stay on the investigation processes of the Lok Ayukta in Karnataka by the Hon’ble High Court in a case involving the son of a high-profile minister, to understand how poorly defined processes in the law can be interpreted by clever lawyers to the advantage of their clients.

While prevention and enforcement are driven mostly by the State and its agencies, there is also no concerted attempt in mobilizing public support and bringing about attitudinal change in them. This is a critical step in the fight against corruption and one needs to develop institutional mechanisms to ensure that this happens on a sustained and continual basis. Systems should be created in a manner to not just deter corrupt practices but also eliminate temptations to become corrupt. One must keep in mind that we need to build procedures not only to de-incentivize corruption, but also incentivize the desire to stay honest. The focus should not be restricted to the public sector but should also include the private sector and the general public. Any structure that is created should attempt to address the entire eco-system and not just pieces of it. Root-cause analysis of the system shows that any anti-corruption work needs to begin with electoral reforms.

4. Having a dedicated agency to take the fight forward:
Any process is only as good as the agency that is implementing it. Having a dedicated agency is critical in creating the focus, the mandate, and the space for this onerous task. A dedicated agency also helps mobilize public and media opinion and helps keep the public memory alive to events and people. One also needs to be cautious that these agencies do not become tools of the powers that be, and that they not only remain neutral and unbiased in their work but are also insulated from them through well established norms. The recent observations of the Supreme Court of India in cases pertaining to the investigations of the CBI does leave room for doubt on this front. Despite the many constraints that the Karnataka Lok Ayukta faces, one cannot dispute the fact that this office has sustained public attention on the many cases that they have investigated and exposed.

5. Community Support & Involvement:
Fighting corruption cannot and should not remain the preserve of a state sponsored agency alone. It will work effectively only when communities who are affected by it get involved. Accountability of the state functionaries, especially in service delivery and public administration is a matter of concern all over the world. The experience of Social audit in schemes like NREGS is indeed very encouraging and needs to be well publicized to reinforce community action. Community support and involvement is a slow process and begins with disseminating information and sustaining their involvement through long periods of time. Non-responsive state mechanisms and long drawn judicial processes are dampeners of community participation; using tools like Right to Information (RTI) can go a long way in forcing accountability on unwilling participants.

6. Resources:
Any anti-corruption activity can only be as good as the people managing it. Recent observations of the Supreme Court in the appointment of the Central Vigilance Commissioner does not impose confidence that the Government of India is serious about creating effective Institutions to fight this menace. People heading such bodies should not only have the technical & administrative capacities, but should also be persons of impeccable integrity and public probity. Apart from the right kind of people, it is also important to allocate sufficient resources and facilities to help the people tackling this issue. The Lok Ayukta offices in many states are one-man institutions with neither the people nor the resources to do any sort of activity. Less than 0.5% of Government’s budget is allocated to anti-corruption activities and this is totally inadequate considering the scale of prevailing corruption.

7. Perseverance:
Any anti-corruption work is a thankless job and is filled with risks and personal discomforts. The journey will be expectedly filled with disappointments and failures and the activist/crusader is exposed to tremendous pressure. Swami Vivekananda spoke of three essential qualities for the social worker – Purity, Patience and Perseverance. These are relevant and applicable to persons/institutions taking on the battle against corruption too. Apart from forming Networks to sustain, support, inspire, and motivate each other, one also needs to consider building the technical, administrative and legal capacities of the persons involved in the campaigns. Social media and IT tools can be very handy in sustaining people’s interest and in spreading the message quickly. Opinion makers, religious heads and other role models & icons (including movie and sports stars) in society need to endorse and lend their names to the different anti-corruption initiatives. All this will help in building a critical mass and help preserve community action long enough to start getting results.

In summary, corruption has become one of the key stumbling blocks for India’s progress today. Unless this cancer of corruption is addressed, no amount of social policies will produce the result that we are all aspiring for. We now need to devise newer strategies to fight this scourge. Mere institutional mechanisms like the Central Vigilance Commission or the Lok Ayukta cannot win this battle without the informed and sustained participation of communities. We now need to use tools like ‘Social Audit’ and the ‘Right to Information Act’ in our fight against corruption. Communities need to be educated, empowered and capacities need to be built to use these available mechanisms.

In short, fighting corruption and its ill-effects needs to become a Community Movement.

Balu

Categories: Musings
  1. Madhu
    December 15, 2010 at 9:10 am

    As usual, typical Indian self righteous indignation!

    Balu, no one is corrupt. It is that severely suffocating environment created by a few people who can “afford” to be righteous and virtuous always that give birth to corruption by those who cannot or not competent enough to be doing right always. After having seen the developed societies in the world we still fail to understand that every problem has an origin, a reason. Unless we “understand” the problem with an OPEN MIND, we cannot solve the problem. Just defining a ‘problem’ using a dictionary (which is nothing but a ‘chronicler’ and not a guiding light) and then setting standards based on once own ‘values’ one can never overcome the innate force of nature.

    When you think deeply about (with an open mind, not under the umbrella of your so called ‘values’) the origin of corruption, we realize that people are just doing what they want to do, what pleases them and gives them most satisfaction and what gets them closer to the ever elusive ‘freedom’. Though we are a ‘free’ country legally, the freedom of thought, expression etc have never been realized in India. This is because of some one telling everybody what is right and what is wrong.

    Point is, we have to loosen ourselves and let things go, AS A NATION. We need to relax not only our legal system and bureaucracy but our very attitude towards being less than perfect. Thats when the really less than perfect who have genuine feelings will contribute to the growth of the society.

    Our goal must not be to end corruption as we know it or as we define it or we understand it. Our goal must be to achieve better standard of living for everyone and a free and equitable society where only hard work and good intentions matter and not how wise, intelligent or rich you are.

  2. Arun Karpur
    December 1, 2010 at 9:02 pm

    Balu:
    I like your essay on how to fight corruption in our existing systems. I feel as much of this issue is a systems-level problem, it is highly cultural too. Some how it has become as an acceptable way of life to be corrupt or to have an ability to steal public money or use position of power for personal gains. As much as these may be appealing to human nature as an easy way out of their existing problems, we constantly need a mechanism that makes corruption a bad thing – similar to female infanticide. So, as we think of building institutions and empowering them with policing powers to prevent corruption, we cannot fight corruption as long as it is culturally acceptable in our value systems. Is there any strategy that can help delink corruption as a desired quality in our value system? How can we market integrity as a fashion or as a value closer to our deeper beliefs of a just society? I would love to know your thoughts on this.
    Fascinating post indeed.
    Arun

  3. Dr.A.P.Sudheer
    December 1, 2010 at 7:30 pm

    Dear RB Sir,

    I endorse your views on corruption and development. I have been working at the grass root level in the three southern states of Kerala, Tamil Nadu and Karnataka for the past 19 years. I can say from my own experience that Karnataka is the most corrupt among them, both at the political and bureaucratic level. One of the reason I observed is the implementation of Panchayath Raj System, with devolution of powers to the district and village level politicians who were already corrupt, prompting the existing honest officials to watch as spectators. At the national level, corruption has been institutionalsed from Indira Gandhi’s period itself and has a reached a new low by involvement of the journalist fraternity. I feel the successes you mentioned in Gujarat and Bihar has its beginings at the Nav Nirman and JP movements of the seventies when both these states were riddled with corruption. In Karnataka, apart from RTI and Social audit, a movement is the need of the hour and I request you to be at the forefront of it.

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