This paper (by the Chief Economic Advisor of India, Kaushik Basu) puts forward a new idea about the control of one kind of corruption, namely, bribery. It is a scourge that deserves to be banished. Tackling this is a problem that has to be a joint effort of all wings of the government and also of all political parties and even civil society. It is in this spirit that this paper is being written.
What the paper puts forward is a small but fairly radical idea of how we can take one step towards cutting down the incidence of bribery. There are different kinds of bribes and what I am concerned with in this paper are bribes that people often have to give to get what they are legally entitled to. I shall call these ?harassment bribes. Suppose an income tax refund is held back from a taxpayer till he pays some cash to the officer. Consider a case where to buy a regular train ticket you are told that you have to pay some money under the table. Suppose government allots subsidized land to a person but when the person goes to get her paperwork done and receive documents for this land, she is asked to pay a hefty bribe. Consider the case of an exporter who has fulfilled all formalities is asked to make an illegal payment before getting a customs clearance. These are all illustrations of harassment bribes. Harassment bribery is widespread in India and it plays a large role in breeding inefficiency and has a corrosive effect on civil society.
The central message of this paper is that we should declare the act of giving a bribe in all such cases as legitimate activity. In other words the giver of a harassment bribe should have full immunity from any punitive action by the state.
The main argument of this paper is that such a change in the law will cause a dramatic drop in the incidence of bribery. The reasoning is simple. Under the current law, discussed in some detail in the next section, once a bribe is given, the bribe giver and the bribe taker become partners in crime. It is in their joint interest to keep this fact hidden from the authorities and to be fugitives from the law, because, if caught, both expect to be punished. Under the kind of revised law that I am proposing here, once a bribe is given and the bribe giver collects whatever she is trying to acquire by giving the money, the interests of the bribe taker and bribe giver become completely orthogonal to each other. If caught, the bribe giver will go scot free and will be able to collect his bribe money back. The bribe taker, on the other hand, loses the booty of bribe and faces a hefty punishment.
Hence, in the post-bribe situation it is in the interest of the bribe giver to have the bribe taker caught. Since the bribe giver will cooperate with the law, the chances are much higher of the bribe taker getting caught. In fact, it will be in the interest of the bribe giver to have the taker get caught, since that way the bribe giver can get back the money she gave as bribe. Since the bribe taker knows this, he will be much less inclined to take the bribe in the first place. This establishes that there will be a drop in the incidence of bribery.
One problem with the new law is the following. Once it is completely clear that a bribe giver has immunity from our bribery law, it is true that many more people will be willing to give bribes. However, since, every time a person gives a bribe, after that it will be in the interest of the bribe giver to expose this act of corruption (since by that not only will she not be punished but she will be getting back the money that she gave as a bribe) the bribe taker will not want to take the bribe. Since the crime of bribery cannot occur without both sides, the giver and the taker agreeing to undertake this act, the fact of greater desire on the part of the bribe giver to give a bribe under the new law will be of little consequence. This paper predicts that the end result will be a sharp decline in the incidence of bribery.
For the sake of clarity, let me emphasize what to the careful reader will be obvious anyway. It is not being argued here that the (harassment) bribe giver be pardoned in retrospect. A retrospective pardon is like an amnesty; and barring rare exceptions, amnesties are not worth it. They encourage corrupt behavior by raising hopes of future pardon and corrodes a society‘s morals.
One can today get a snapshot view of harassment bribery across the nation thanks to the innovative work by the not-for-profit organization, Janaagraha, and its remarkable website, ipaidabribe.com. It illustrates well how citizens are often compelled to give a bribe; and by bringing such practices out of the closet, the idea is not to take away the guilt from such actions but the reverse, to discourage the very act of bribery. The legal change that this paper suggests will simply strengthen this kind of action, by strengthening the voice of the harassed bribe giver and increasing the penalty on the bribe taker.
I have confined the above analysis to harassment bribes3 The question that .naturally arises is about other kinds of bribe, for instance, the kinds of bribery that are believed to occur when government gives out big development contracts.Should the bribe giver be given full immunity in such cases? The simple answer to this is a ‘No‘.
View the full paper @ http://finmin.nic.in/WorkingPaper/Act_Giving_Bribe_Legal.pdf
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Reply from P.Sainath to this ‘radical idea’ on The Hindu :
The Chief Economic Adviser even says where bribery is proved in court, the bribe should be returned to the giver. At present, the bribe giver and taker share a “collusive bond” since both have violated the law. Giving the former immunity, he says, will break that nexus. In his view, the changed law would incentivise the bribe giver to rat on the bribe taker, since he himself faces no punishment. Presto! A ‘dramatic drop in the incidence of bribery.’ As Dr. Basu proudly says: “The reasoning is simple.” It is, actually, simple-minded.
The Chief Economic Adviser dresses up these arguments for middle classes forced to make payoffs. For instance when a person allotted subsidised government land “goes to get her paperwork done … she is asked to pay a hefty bribe.” Yet, his law will in no way curb bribery where scarcity exists. For instance putting a child into school where seats are hard to get. Or even getting that flat or the land he speaks of, allotted. Raising the stakes Dr. Basu’s way could mean the victims face heavier demands. After all, the bribe taker needs to be compensated for the higher risk he now runs. And there is no focus at all on government failures that lead to scarcity. Nor on priorities that gift the corporate sector over $103 billion in write-offs in just this budget. Nor on spending policies that cut food subsidies and punish the poor.
The idea of legitimising this culture is an obscene one. Bribery is systemic. To ask a people burdened with it to accept bribe-giving as legal is to demand they accept both corruption and the existing structures of power and inequity it flows from. This is a perverse idea. And it is nowhere as “novel” as he makes it out to be. As early as the 1960s, Gunnar Myrdal trashed such claptrap for seeking to create “resignation and fatalism” amongst the poor and less privileged. And for projecting such “asocial behaviour” as normal. Decades ago, debates on this idea ended up acknowledging how morally corroding such practices were. But I guess with a government as embroiled in corruption as the one he advises, there’s a need to exhume the corpse of that argument and dress it up as “novel.” Dr. Basu dolls up corruption — for that is what bribery is — at precisely the time the Indian people are showing their revulsion to it.
Dr. Basu’s “small but fairly radical idea” suits those who can pay. And devastates those who cannot. Those who can and do make payoffs are unlikely to upset a system that works for them. Where bribery is systemic, the “collusive bond” of giver and taker will strengthen if this dishonest idea becomes a law.
Take this assumption: “Under the new law, when a person gives a bribe, she will try to keep evidence of the act of bribery — a secret photo or jotting of the numbers on the currency notes handed over and so on — so that immediately after the bribery she can turn informer and get the bribe taker caught.” Poor people taking secret photos with hidden cameras (available at the nearest malls) and subtle pens which mark notes so the bribe taker won’t know? How dumb an idea is that? The assumption that bribe givers will ring the bell after the bribe ignores the realities of power equations in our society and assumes access to legal recourse. Where the giver is poor, Dr. Basu’s law will favour the taker. Where the giver is rich, it will favour the system of bribery.
Consider these situations:
The perpetrators of the cash-for-votes scam that corruptly kept this government in power would walk scot free in Dr. Basu’s law. (Maybe that’s the intention?) Can you see them saying, ‘hey, these are the MPs who took our cash?’
What if a 2G scamster says he felt legitimately entitled to spectrum and paid “harassment bribes?”
It would be fine for candidates to buy off voters during elections. After all, it is the takers who are to be punished, even if they turn out to be a few million.
Will a person offering a bribe to a judge be punished if the latter reports it? If the judge accepts the payoff, will the giver report it?
A bribe giver exploits the drug-abuse habit of an official. The drug peddler has full immunity from any punitive action by the state?
An Indian agent of a foreign intelligence outfit successfully bribes Defence Ministry officials. Would that agency then say ‘Aha! They accepted kickbacks?’ Great! We lynch the officials and congratulate the espionage ring — which is also entitled to its money back.
These situations would be brushed off by Dr. Basu as “non-harassment bribes.” He asks: “Should the bribe giver be given full immunity in such cases? The simple answer to this is a — no.” Dr. Basu says, “A full answer to how the law should treat such cases will have to await further analysis.” However, he is “inclined to believe that even in such [non-harassment] bribery cases … the punishment meted out to the bribe taker should be substantially greater than on the giver.”
Is he wanting a certain “class of bribes” to be legalised or is he really asking for the bribes of a certain class to be okayed? It seems the latter. The companies behind the 2G kickbacks will do fine in Dr. Basu’s law. Their conduct will have to “await further analysis.” Dr. Basu half admits his scheme could leave public servants “vulnerable to blackmail and false charges of bribe-taking.”
Interestingly, about half the references listed at the end of the paper hark back either to other papers by the author himself; to papers co-authored by Dr. Basu with others, to those by still others in books he has edited: or to papers by yet others citing him in the title. Modesty would surely be a small but novel idea here.
Other, clever ideas from Dr. Basu:
This year’s Economic Survey of India (referred to by cloying TV commentators as ‘Kaushik’s Survey’) links inflationary pressures to financial inclusion of the poor. “This must not deter us from pursuing financial inclusion …” but we “need to be aware of all its fallouts.”
In the middle of 2010, he favoured decontrolling of fuel prices — which would, he argued, help tackle the price rise, even if it “might raise inflation in the short-term.” (The Hindu, June 14, 2010). Again, this came at a time when food price inflation was pushing past the 15 per cent mark. And even as the FAO was warning against rising food prices worldwide and the immense hardship they would bring. (In December 2010, the FAO’s food price index touched a record high.) And India since 2005-06 has seen possibly its worst five-year period in terms of food price increases.
Much earlier, Dr. Basu wrote a piece in The New York Times (November 29, 1994) titled “The Poor Need Child Labour.” In it he explained, among other things, why he had once continued to employ a 13-year-old at his home. (Another small but novel idea?) Dr. Basu is also an expert on ‘development’ who has long argued against banning child labour.
A ‘small but fairly radical idea’ for this government: can we get somebody who talks sense?