Wednesday, January 24, 2007

Topic "Bribery..." - Complete Analysis

I am not happy with the GD. The topic was very mundane and that was the trap and the group fell in en-masse with a few exceptions. You need to raise above the easy topics. Do not keep giving more examples and more obvious statements. If one says, police are corrupt, somebody else says it is there in military too. What is the value you are adding there. The group has agreed on the point that bribery exists in the Indian scenario. They also seem to fairly agree that most of the times it does not distinguish between rich and poor. So lets move ahead and use the rest of the GD time in talking something more rather than repeating the same stuff in different forms.

Only Himanshu made an attempt to see if it is an economic balancing factor. The rest just dismissed the idea with only one argument of lack of distinction between rich and poor. No one even tried to raise the bar and talk about the differences between salaries and incentives in Government and private sector. No one even took a strong stand saying that higher salaries may prevent bribery. When you don’t bring strong arguments, they don’t get discussed in detail by the group. You do a passing mention, then the group will not even notice.

My points
High salaries itself may not prevent bribes. There are so many top officials receiving good salaries and having good properties still taking bribes. This shows that bribery in engrained in the system and hence we need to wield a strong stick apart from giving the carrot of higher salaries in Government jobs.
Do we get bribed by companies in form of incentives? ---- I would have liked someone doing some introspection and comparing incentives with bribe. Understand that they are different, but if you don’t even analyze hard, it wont come out
Can bribe be looked as a transaction cost from economics point of view? The problem could be it is like a flat tax and everyone gets affected to the same extent. ----- You are all aspiring MBAs. Think economically especially when the topic urges you to
If we really think that bribery is such a menace causing such a problem to the whole nation, can we atleast pledge to make an individual contribution by not paying it at all ‘at any cost’? ---- I am sure most in the group would disagree with this 
People say it has dented the country’s image. As a Government servant earning a pittance for a salary, with rising costs of basic things especially in urban centers, do I care about my family or do I care about my country. And this is the country, that is ready to extend tax break to the booming IT sector, but takes years to implement pay commission recommendations

Parting shot
Bribes have helped in creating an economic balance in a country like India where, with the sudden economic boom, the private sector boomed leaving the Government salaries far behind. Though such sudden growth causes unintentional economic imbalances and bribes have helped reduce the imbalance, this is not an efficient system and hence unviable in the long run

Points by the group:
The extent to which bribery has crept into the society that that a guy taking bribe has been himself bribed by others....its more of a balancing phenomenon, where the general ledger of public sums up to 0. So does that justify a menace like this? Of course not ----- Point taken, but the final stand is not supported by the previous statement.
Bribery is reciprocal i.e the person bribing an official too has vested interests. So, citizens too encouraging bribery
Bribery by Judiciary is the biggest sin of all. If judiciary indulges in bribery, democracy would turn into anarchy. crimes would shoot up ---- Crimes shoot up, agreed. But it takes more to turn a democracy into an anarchy. Avoid passionate and over-arching opinions. Also a little diversion from the topic
India is booming, and private-sector wages are soaring. So civil servants are justified in feeling left behind ---- They are feeling left behind, but not sure if they are ‘justified’.
With the pittance the govt employees are awarded, bribery on their part is fair to some extent. Dont they dream to send their kids to quality public schools
Pay the public sector employees private sector salaries if you want to see quick action and no bribery ---- does that mean that people getting top pays do not receive bribes?
People with any sort of responsibilities in govt. positions right from peon to administrative officer had a miscalculated sense of job responsibility which included harassing common people endlessly with their official power
On top of all these, while government job meant job security for life, the payment of government employees was not in sync with markets as such. While it was good enough to survive, it wasn’t good enough monetarily to bring them in sync with their aspirations. With all the power in hand, it was a matter of time that this financial gap in pay check was filled in by accepting a cut or percentage for whatever official duty they were executing
Some of the staring challenges associated directly/indirectly with bribery are lost productivity, bankruptcy of almost all Public Sector Undertakings, loss making State Electricity boards, bankrupt state governments, high budget deficit of the Govt of India, delayed or poorly executed projects of national importance
Many Indians take public services for granted, if there is any and don’t mind paying bribery for avoiding their monthly electricity, water bills etc
The end result is that a legitimate tax payer end up subsidizing a corrupt one and resources which could have been utilized on health services, education, defense and other priority sector are diverted to fund these utilities/activities
In short, bribery causes immense opportunity cost to our nation in forms of resources being denied for future generations because of mismanagement of current resources ---- mismanagement may not be the direct result of bribery though bribery adds to it
Bribery can be described as an act of giving some incentive to carry out a particular work ---- I thought it was called salary 
is it just limited to government employees ---- Good question
Bribery is nothing but our mere act of procrastination ----- REALLY!!
As we have seen in the movie "Lage Raho Munnabhai" regarding the pension thing, we sud really take strong steps to prevent people taking bribes ---- ‘better examples please’, many may not have seen the movie, however popular
Bribery is the menace which breeds inefficiency and favourism in the working culture of the country. It makes working with the govt. difficult and may worsen the law and order situation in the country ---- Oh, doesn’t it cause floods and famines too. Keep your passions in check and take stands that only derive from the points that you have made.
Considering it as a means to curb t he imbalances in the economic gap is like suggesting a wrong solution to a right problem ----- Very Good point. But why are there no strong supporting arguments
A person demanding bribe doesn’t differentiate between the rich and the poor ---- Mostly true.
It increases corruption and redtapism which has a negative impact on the image of the country hindering FDI investment and global operations --- Good point too. But bribery is corruption, it does not increase corruption
Had such rampant bribery not been there, India would have eradicated poverty long ago ----- SURE?? What facts to support it
Bribing can b taken s a means of reducing the economic gap partially, looking from a different perspective. For eg, the distribution of TVs, gas stoves by Karunanidhi in the recent election acted as bribing the poor to cast votes...At least with this kind of positive bribing, the poor people got something they dreamt off for years ---- Good point. Though Karunanidhi may not have been correct
Since its inception, India is facing the problem of bribery and now a days when private sector salaries are soaring, the corruption has actually come down ----- Corruption may have come down, has bribery come down? Also what do you mean since India’s “inception”
To say that bribe becomes impediment in doing things done isn't entirely correct. In fact, Businesses always account the bribery costs while applying for licenses and getting things done
What i mean to say is, all other things remaining same, you just remove the bribery from the system, Does anyone frankly believe that the government system will start working fast ----- Good perspective
Since opportunity cost of bribery is already widely known mostly, it can be argued it is just a tool of making system work
Bribery equivalent to the practice of payola in North American countries, where music bands pay radio stations a certain amount of money to play their songs on radio. Opponents argue that poor bands are disadvantaged due to this but there are few poor bands which have said that their music was a bit difficult and people wouldn't have liked their songs initially ---- Cool point
In fact, a lot of aspirants for Government jobs apply for these jobs only for the lure of power and income from bribe. Perhaps, it is only due to bribery that still we are getting the cream of the students in UPSC jobs ---- Wonderful perspective. Though it is a sad truth
If we want to remove the ill-effects we attribute to bribery, We must remove our archaic laws, host of middlemen between government and common citizen, introduce accountability and a proper appraisal system in which those performing their duties responsibilities are duly rewarded and not punished, as it often happens in India.
paradoxical nation, that is willing to pay to get out of trouble, but resists otherwise
The government officers, who dont distinguish between rich & poor while quoting their "rates" ---- I am not sure of this. Go in a car with tie and a blazer and I am sure you will get fleeced more
The cause of this menance, is the permanent employee of the government, who cant be fired, transfered, or downgraded. He has no performance measures, & as long as his manager agrees, they have an amicable relation ---- may not be true again since there are lot of temporary staff who still receive bribe
If the government employees, had some incentives for the quality of work done, or the speed of it, they would also have to gain from doing work efficiently ---- They do have a system of ‘Confidential Reports’ used for promotions, but it may not be the best system
One positive thing that comes of it, is that we can pay to get "deluxe" service for jobs that would take the designated time otherwise. If you want it fast, pay for it! Very captialistic in that sense.
Bribery follows a vicious cycle..wherein by bribing a person 2day 2 get ur work done...u r actually giving him an impetus 2 repeat d same wid d others at large --- Good point
Individually speaking ,we have absolutely no qualms in accepting or giving bribe..but when d matter cocerns our MP's ..the alleged cash 4 query scam...we fret at d plight of our country --- good again
Another way 2 use it as means of correcting economic 2 make it legal 2 charge a fixed sum of money from those who want 2 hurry up wid their work..nd at d end of d month..distribute d amout so collected evenly among all d members of a department --- very cool point saying that bribes serve as an incentive 4 d govt. clerks 2 pass files..nd that if we undo wid it..d work will actually slow down..i guess u r forgetting that they r not offering free services...they draw salaries at d end of d of every month --- good counter, though you missed the caveats

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Anonymous Anonymous said...

Hi gyanee, I had read a special report in The Economist on Bribery few weeks back. My Analysis was inspired from the same. Here's the link.

2:35 AM, January 25, 2007  
Blogger Gyan-ee said...

Hey Himanshu,

Most of us are not able to access the content since we dont have a subscription.
Can you cut paste the key points of the article in the comment section of the analysis? I think putting the whole article would be a copyright violation

4:07 AM, January 25, 2007  
Anonymous Anonymous said...

Hi gyanee.. I got your point. Here are some excerpts from it. I think the article never supported Bribery and in fact was more factual. However, it had less of a moaning-kind of attitude that we always find in our Indian newspapers.

It starts with:

GIVE people power and discretion, and whether they are grand viziers or border guards, some will use their position to enrich themselves. The problem can be big enough to hold back a country's development. One study has shown that bribes account for 8% of the total cost of running a business in Uganda. Another found that corruption boosted the price of hospital supplies in Buenos Aires by 15%. Paul Wolfowitz, the head of the World Bank, is devoting special efforts during his presidency there to a drive against corruption.

For most people in the world, though, the worry is not that corruption may slow down their country's GDP growth. It is that their daily lives are pervaded by endless hassles, big and small. And for all the evidence that some cultures suffer endemic corruption while others are relatively clean, attitudes towards corruption, and even the language describing bribery, is remarkably similar around the world.

It also talked about how various linguistics are used in various countries to describe bribery:

"Another term widely used at border crossings is “expediting fee”. For a euphemism it is surprisingly accurate: paying it will keep your bags, and perhaps your contraband, from being dumped onto a floor and sifted through at a leisurely pace. (A related term, used in India, is “speed money”: paying it can get essential business permits issued considerably faster.)"

A few points regarding hypocrisy and notions of the western world regarding bribery:

"Rich Westerners may not think of their societies as plagued by corruption. But the definition of bribery clearly differs from person to person. A New Yorker might pity the third-world businessman who must pay bribes just to keep his shop open. But the same New Yorker would not think twice about slipping the maître d' $50 to sneak into a nice restaurant without a reservation. Poor people the world over are most infuriated by the casual corruption of the elites rather than by the underpaid, “tip”-seeking soldier or functionary.

Indeed, in the world's richest economy, what many see as simple bribery is an integral part of lawmaking. In Washington, DC, it is accepted that a lobbyist's generous campaign contribution to a crucial congressman may help to steer some spending to the lobbyist's client."

Lastly it described about the causes and prevalence of Corruption and bribery across the world(i think i might be sued for sure for copyright violations.. if you feel like it, please delete the comment :) )

"Yet corrupt practices in America and western Europe are nothing like as pervasive as in other parts of the world. There is no single cultural factor that inclines a society towards corruption, but economic factors play a big part. Most clearly, poverty and bribery go together.

But which causes which? Mr Wolfowitz's crusade at the World Bank is based on the idea that corrupt countries fail to develop. But several countries in Asia have grown rapidly at a time when cronyism was common, including Indonesia and South Korea in their time. Today's most conspicuous example is China with its explosive growth. Polls consistently show that corruption is the top complaint of ordinary Chinese. From time to time the Chinese government executes particularly egregious offenders, to no apparent avail. And yet foreign investors cannot pile into the country fast enough. Although most economists agree that corruption slows development, a corrupt country is nevertheless capable of rapid growth. Countries may be corrupt because they are poor, and not the other way round.
A cheque must never be handed over at the same time as a lobbying pitch is made. Much better to wait and do it in a hallway later

Jakob Svensson, an economist at Stockholm University, has cut through cultural stereotypes to search for hard data on corrupt economies. He has found that socialist and recently socialist economies show higher levels of corruption than others. Among the factors he has tested for correlation with corruption is the overall education level of the adult population. A second is openness to imports (measured by imports as a proportion of GDP), which is linked with opportunities for smuggling. A third is freedom of the press (as ranked by Freedom House, a civil-liberties watchdog), on the hypothesis that independent journalists will expose, and thereby curtail, corruption. The fourth is the number of days needed to start a business, a proxy for the number of permits required, and therefore red tape. Mr Svensson found clear correlations between all these variables and the overall level of corruption.

Among the many factors that determine the level of corruption in a country, one stands out. Whether it takes the shape of an American congressman dispensing a $2 trillion budget or a horde of petty officials administering a Bible-sized rulebook, where there is a lot of government, there is a lot of bribery. Corruption thus offers yet another confirmation of the dictum attributed to Thomas Jefferson that “the government is best which governs least.”

6:02 AM, January 26, 2007  

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