Career Launcher's PDP Blog

Is a little corruption acceptable in developing countries?

February 4, 2011 at 11:22 pm Mod Leave a comment

It is a no-brainer that Corruption In India is at its rampant best. There is not one section of the society that is spared from it. Corruption in the form of bribery takes the cake and given that it begins at the grass root level makes it even more difficult to monitor and control. The striking though well known findings points out that close to half the bribes are requested by the Government Officials both at the state and national level. The same government personnel who are entrusted with the development of the nation are filling their own pockets. No wonder then the nation’s politicians are the most corrupt lot.

However, it it was only for the petty money minded officials filling their own pockets, the enormity of the bribery might be restricted to a certain level. What if corruption takes the shape of a billion dollar behemoth? According to Management Guru C.K.Prahalad, the cost of corruption to the country might as well exceed Rs. 250,000 crores.

Public corruption is generally viewed as an obstacle to the development of a country. Many governments, international organisations and aid agencies, as well as donor-states have special agendas to fight the problem. Yet in the countries with high levels of corruption, arguments have been made that because corruption is pervasive it has to have some benefit. While definitely not something to be proud of, public corruption is seen as an unavoidable side effect of development.

Arguments in favour:

• Corruption reduces bureaucracy and speeds the implementation of administrative practices governing economic forces of the market. Corrupt public officials acquire incentives to create a development-friendly system for the economy. As a result, corruption starts a chain of benefits for all the economic actors, making over regulated obstructive bureaucracies much more efficient.
• Corruption is a Western concept and is not applicable to traditional societies, where corruption does not have such a negative meaning. Many traditional societies with a “gift culture” have a different understanding of civil responsibilities and etiquette. The social structure and political traditions of many countries are based on the beneficial exchange of rewards for services rendered, and cannot survive in its absence.
• Corruption is a condition of developing states, and should be seen as a childhood disease. Western countries themselves were once the most corrupted societies of the world. Not only is corruption endemic in under-developed nations, it is also an evolutionary level that precedes development and industrialisation. Corruption is a side effect of emerging capitalism and a free market. Underdeveloped countries cannot combat corruption without having achieved the level of economic development necessary to fight it
• In many countries corruption can be seen as a natural response to shortages. Often in developing countries the demand for a service such as access to the courts, education, healthcare, or the attention of civil servants and politicians far outstrips the ability of public officials to cope. To prevent the system from grinding to a complete halt, a way of rationing has to be found and corruption provides such a system. In effect it places a price upon a service and enables officials to prioritise and go at least some way towards dealing with all the demands upon their time and resources.
• Corruption is not a problem in its own right, but rather a symptom of wider problems of governance in some states. Misguided socialist principles have left many developing countries (and some developed ones) with complex and burdensome tangles of rules and regulations administered by huge state machines. Often there is a lack of property rights, meaning the poor are not safe in the possession of the land they farm, and cannot borrow money against it in order to invest for the future. The poor pay of public officials is also common. These problems make ordinary people highly dependent upon the actions of individual officials and give the officials every incentive to exploit their power. Crackdowns on corruption will achieve nothing until these underlying problems are addressed first.

Arguments against:

• Countries with lower levels of corruption still have efficient bureaucracies and enjoy better economic well being. Corruption in the public sector is the biggest obstacle to investment, causing misallocation of valuable resources and subversion of public policies. It is also an invisible tax on the poor. GDP levels for deeply corrupted states could be much higher without corruption.
• The very idea of corruption is unethical, regardless of one’s tradition. Cultural relativism is just an attempt to legitimise corruption by the corrupted. Not enough evidence has been presented to support the suggestion that corruption is required by certain socio-cultural practices. Moreover, regarding corruption as an innate quality of human culture undermines the hope for any improvement and is inherently fatalistic, serving as an excuse for creating cultures of corruption and fear.
• Corruption is universal, and the fact that a nation is economically developed does not mean that it has less corruption. Some First World countries have high rates of public corruption. Having a low level of corruption, however, gives a unique advantage to any developing nation. Appropriate policies can substitute for any positive effects of corruption.
• Corruption may be a response to supply and demand, but it is still not beneficial. By rationing goods, which should be freely available to the whole population, such as healthcare, justice and fair treatment from those in authority, corruption ensures that these public goods are available only to the rich. Where corruption is widespread, the poor always lose out and society becomes ever more divided. It is also bad for society as a whole when corruption provides incentives for bright young people to get jobs as unproductive public officials, because of the financial rewards available for “rent-seekers”. The private sector, already struggling from the added costs of corruption, suffers even more by its inability to recruit the brightest and most ambitious young people, and levels of entrepreneurship and economic growth suffer as a result.
• Corruption is very bad for democracy as it can lead to the capture of the state by special interests. In corrupt societies even free and fair election results count for little. Once in power politicians of all parties are likely to concentrate on enriching themselves, taking money from individuals and companies in order to promote their own interests rather than those of their voters or the country as a whole. Sometimes politicians can be bought outright, as when they are persuaded to change political party for financial reward. To avoid accountability to the electorate, such corrupt politicians then have an incentive to corrupt elections, by bribing the electorate with their own money and/or plotting to make the electoral process unfair. Not only is this unjust, it also creates contempt for democracy and makes military coups and other forms of dictatorship more attractive to many people. Finally, it is economically disastrous as it gives those in power the incentive and ability to continually create new laws and regulations, which they can then exploit in order to extract bribes.

Entry filed under: General Knowledge Update, Important GD Topics, Uncategorized. Tags: Corruption, India.