BackThe kind of corruption that could do India a good turn
Bribery has been shown to be bad for development only if it’s too chaotic to generate value
PremiumAs an Indian, I had many villains in my life, but the only ones I spoke to were autorickshaw drivers. As you know, they always demanded “extra over the meter". So to annoy them, I would place ten rupees “over" the physical meter. I imagined that the middle-class fury at their attempt to fleece us was a reasonable moral response. Until I visited a first-world nation for the very first time—Japan. The taxi fare from the airport to the hotel was my week’s wage; public transport was many times more expensive than Indian taxi fare. And the simple truth occurred to me that auto fares in India were ridiculously low and designed to keep the driver poor to the advantage of people who were richer than him, and his overcharging was a natural compensation for an economic design flaw.
Something is wrong with what we think is right. Many of our moral expectations are absurd. Why did Indians flay Sachin Tendulkar for seeking a waiver on customs duties on a Ferrari he received as a gift when most of us also seek tax exemptions? Wasn’t the anti-corruption movement merely a war between bribe-takers and bribe-givers? Isn’t there something unconvincing about our own self-loathing over bribery, corruption or being “too broadminded" in other ways?
We have been trained to chant that all of India’s problems emerge from corruption. But the nation in plain sight tells us a very different story. That not all forms of corruption are the same, and some forms of it might even be beneficial. In an ideal world, there should be no corruption at all, but an ideal world wouldn’t have human beings.
In her book China’s Gilded Age: The Paradox of Economic Boom and Vast Corruption, Yuen Yuen Ang, who is a “political scientist", says that there are four broad types of corruption. Petty theft, grand theft, speed money and access money.
Petty theft and speed money are committed by the non-elites, while grand theft and access money are monopolies of the rich. Petty theft is the corruption of low-level government officials and minor politicians. Grand theft is the much larger embezzlement of public funds by major politicians and powerful bureaucrats. Speed money is the bribe that citizens pay to access services that are meant for them. Access money, Ang says, are the “massive bribes" businesses pay to get lucrative deals, approvals and bailouts.
In India, we have been trained to believe that access money is the worst form of corruption because it entails huge amounts and involves the most powerful people. But, Ang argues, China has continued to prosper despite corruption because its primary form of corruption is access money. In fact, Ang says, access money is beneficial to economic progress. “While corruption is never good, not all forms of corruption are equally bad for the economy, nor do they cause the same kind of harm."
Ang says that access money has locked China’s top bureaucracy in a competition to attract investment. A by-product of this system of greed is swift, wide and deep prosperity. Also, at times access money does not deny another person’s right to do business or disadvantage others. Often, it is a price paid for the creation of something new, which may not have existed otherwise. A refinery perhaps, or a bullet train venture. This is why Ang says access money, while harmful, does less harm than other forms of corruption.
Petty theft and speed money rob the poor, make civil rights and entrepreneurship costly, and give low-level officials a powerful motivation to continue this unfair system. Grand theft conducts this at a much larger level. But access money, Ang says, brings huge investments.
In any system that works, there is a role for a thug. The thug ensures order by getting rid of other thugs. When the power of the prime thug is ambiguous, it means the system is not working well. Government itself is a benign thug. In a well-governed society, the government, in return for protection money, protects people who in turn are happy to pay up in the form of taxes. Even in the universe of bribes, there is a system of thugs. A superior bribery system can abolish all other competing modes of corruption. The access-money system is that primary thug of corruption in China, as it motivates powerful officials to terminate other forms of corruption. This is why, Ang says, compared to India, China has very little petty theft, grand theft or speed money.
This present condition of China, she says, is very similar to the gilded age of the US, the late 19th century, when it graduated from chaotic forms to a higher form of corruption, the system of access money. Parts of that system were legalized.
Many things that a nation terms bad may actually be useful to it. Private enterprise, for example, during our destructive socialist era of economic idealism. In 2003, Arun Shourie, who has battled corporate corruption all his life, said that Indians should thank industrialists like Dhirubhai Ambani “not once but twice over" because “by exceeding the limits in which those restrictions sought to impound them, they helped create the case for scrapping those regulations, they helped make the case for reforms."
India’s curse is that its access money system has not been able to abolish other forms of more harmful corruption. Across India, politicians and officials at lower rungs harm Indians through petty theft and speed money. Sophisticated politicians and officials who conduct grand theft or thrive on access money have not yet created order. In India, corruption is still in its chaos phase.
Manu Joseph is a journalist, and a novelist, most recently of ‘Miss Laila, Armed And Dangerous’
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