MM : Getting less corrupt? : Sept 29, 2007
Getting less corrupt?
Latest international index ranking shows graft in India is declining
The thirteenth annual ranking of the Transparency International shows
that India has improved her rank in corruption. This corruption perception
index (CPI) is constructed on the basis of data compiled by TI from experts.
The “experts” from whom data is taken are actually organisations which track
indicators of rule of law, efficiency of judiciary, extent of bribery, etc.
A country is ranked on its CPI only if at least three independent sources of
(expert) data are available.
This index is a number between zero (most corrupt) and ten (least
corrupt). This year, out of 180 countries that were scored, India stood at
72, along with Brazil and China. Is it a coincidence that three of the so
called BRIC economies (the fast growing giants) are ranked identical in the
corruption index? The fourth among the BRIC economies, i.e., Russia, is
ranked at 143. The score for India is 3.5 while Russia is much lower at 2.3.
Along with India, China and Brazil, there are four other
countries with the same
score of 3.5. These include Mexico, Peru and Morocco. The top honours
are taken by Finland, Denmark and New Zealand (all score 9.4) while bottom
(most corrupt) is taken by Somalia and Myanmar (score 1.4).
There are several determinants to corruption. Economists believe it is
all about economic incentives. If there’s money on the table, and nobody’s
looking, then you are bound to steal. So say economists! (How dumb and
dismal, did you say?) Whereas anthropologists think corrupt tendencies are
influenced by culture and ethos. Some cultures simply exhibit less
corruption, some don’t. In some cultures what is considered a bribe
elsewhere, is considered a harmless gift.
In TI’s corruption index, Scandivanian countries always come on top,
i.e., least corrupt. Must be their cold climate! In the backdrop of T20, you
might wonder, does cricket make honest gentlemen? Surprisingly not. The
world’s least corrupt country, New Zealand, is a cricketing nation. And
Australia and England (UK) are in the top 10. But Bangladesh, Pakistan and
Sri Lanka are almost near the bottom. So is Zimbabwe. In fact, among South
Asians, Indians have done the best. So cricket cannot explain less or more
corruption.
To test whether corruption stems from economic incentives or from
something else, two economists did a simple experiment in New York. If you
were told, be as corrupt as you want, and nobody can arrest you – the
“incentive” minded would go wildly corrupt, right? Indeed such a blank
cheque for being corrupt has been given by the New York municipality to all
diplomats who work at the UN (which is headquartered at NY). These guys can
park anywhere they wish, and do not have to pay any parking fine, since they
enjoy diplomatic immunity, i.e., zero legal enforcement. Otherwise, ordinary
New Yorkers pay fines of upto $500 (Rs 19,857 approximately) or their cars
get towed away. After looking at data for the past 15 years on unpaid fines
by cars with diplomatic licence plates, the research paper pointed out that
not everybody at the UN is corrupt.
UN officials from Japan, Norway and even Turkey were careful to avoid
fines, while those who parked illegally with impunity were from Kuwait,
Egypt, Chad and even Pakistan. India fared in the middle, near France, Laos
and Slovakia. Of course, the actual research paper (published last year) is
more complex, but the message is clear – culture matters!
The role of incentives cannot, however, be underestimated. As import
duties and customs duties came down drastically, the corruption in customs
department also came down. Similarly, as income tax rates stabilised to
lower levels, tax evasion and bribery among tax officials also declined. But
to be able to sit with peers like New Zealand, we have to do much more than
cricket!
Ajit Ranade on the wheels that make Mumbai run – money and economy
Economists say corruption is all about economic incentives whereas
anthropologists believe that corrupt tendencies are influenced by culture
and ethos
Publication:Mumbai Mirror; Date:Sep 29, 2007; Section:Views; Page Number:31