Saturday, December 5, 2015

HOW TO REDUCE CORRUPTION

Manmohan Singh became Prime Minister in 2004; soon after that he spoke to the nation on television. He was known to be extremely honest; he came in with high expectations - including mine. This is from Business World of 2 July 2004.

Corruption can be prevented 

A prime minister must lead the nation; and to lead, he must communicate. This was the rationale of Manmohan Singh's speech. It came none too soon, and I hope there will be many more. But to be effective it must be well-crafted, and there was much in his speech which could have been omitted. Whatever came out of the Common Minimum Programme could have been left there, and the anodyne references to other countries could have been left to the foreign minister to make. The point of this first speech was to convey his message and lay out his agenda; in between the bland and worthy utterances, he did say what he wanted to say. I thought that he wanted, particularly, to convey three things. First, the poor and the deprived mattered. Economic growth did not automatically benefit everyone; it was the government's duty to help people and communities that did not share in the growth or who were in distress. Second, only the government can build up infrastructure and make sure that people get social services. Hence government can not be wished away. It has to be there, and it is now time to make it work efficiently. And finally, those that are pained by the dismal standards of our politics should come forward and take part in public life. That is what he had done, and he wanted many more of us to join him.
No prolonged debate is necessary about what the government should do or not do. But there is such despair with the government's ability to do anything efficiently or honestly that we have stopped the government from doing even things that governments routinely do elsewhere. In many industrial countries, citizens pay an annual television licence fee, or a vehicle registration fee. We have abolished both because they bred so much corruption.
Where the government has to be involved, we try to prevent corruption is by banning contact between the government servant and the citizen. Prime ministers and chief ministers have often promised to end licence-permit raj. Chandrababu Naidu spread a Wide Area Network over his state, making it possible to transact business with the government over the net, without encountering a bureaucrat.
This solution is fine where the government servant is not required to exercise his judgment or authority; babus can sell stamps, and young people on contract can photograph a person and make up a driving licence. But they cannot judge his driving skills without getting into a car and watching him drive. A revenue officer cannot stop a businessman from cheating on his taxes without asking him questions, examining his books or asking how he got money for his son's wedding. If the government gets a bridge built, its engineer will have to inspect it to make sure it will not collapse. The government cannot be run without exercise of judgment, and often of compulsion. And if it is to be free of corruption, the civil servants who use judgment and force must be honest.
The commonest device to keep people honest is to impose checks on them. That is what the comptroller and auditor general is supposed to do. That, come to think of it, is also what Parliament is supposed to do. It has two committees — the Estimates Committee and the Committee on Public Undertakings — specially set up for this surveillance. To these, Manmohan Singh would like to add public-spirited citizens to keep a watch over public servants. But these ex-post checks are highly fallible. There is usually a convergence of interest between the corrupt official or minister and the man who bribes him. It is in the interest of both to conceal corruption. Hence all that greater surveillance can do is to generate more suspicion, fear and paralysis.
If you want an honest government, you have to have public servants who are innately honest, who admit only upright members and who throw out the dishonest amongst them for the ignominy they bring upon public service. What the prime minister should look for is a reconstruction of the civil service, and a set of ex-ante rules to prevent arbitrary and potentially corrupt ministerial decisions.

ister must lead the nation; and to lead, he must communicate. This was the rationale of Manmohan Singh's speech. It came none too soon, and I hope there will be many more. But to be effective it must be well-crafted, and there was much in his speech which could have been omitted. Whatever came out of the Common Minimum Programme could have been left there, and the anodyne references to other countries could have been left to the foreign minister to make. The point of this first speech was to convey his message and lay out his agenda; in between the bland and worthy utterances, he did say what he wanted to say. I thought that he wanted, particularly, to convey three things. First, the poor and the deprived mattered. Economic growth did not automatically benefit everyone; it was the government's duty to help people and communities that did not share in the growth or who were in distress. Second, only the government can build up infrastructure and make sure that people get social services. Hence government can not be wished away. It has to be there, and it is now time to make it work efficiently. And finally, those that are pained by the dismal standards of our politics should come forward and take part in public life. That is what he had done, and he wanted many more of us to join him.
No prolonged debate is necessary about what the government should do or not do. But there is such despair with the government's ability to do anything efficiently or honestly that we have stopped the government from doing even things that governments routinely do elsewhere. In many industrial countries, citizens pay an annual television licence fee, or a vehicle registration fee. We have abolished both because they bred so much corruption.
Where the government has to be involved, we try to prevent corruption is by banning contact between the government servant and the citizen. Prime ministers and chief ministers have often promised to end the licence-permit raj. Chandrababu Naidu spread a Wide Area Network over his state, making it possible to transact business with the government over the net, without encountering a bureaucrat.
This solution is fine where the government servant is not required to exercise his judgment or authority; babus can sell stamps, and young people on contract can photograph a person and make up a driving licence. But they cannot do is judge his driving skills without getting into a car and watching him drive. A revenue officer cannot stop a businessman from cheating on his taxes without asking him questions, examining his books or asking how he got money for his son's wedding. If the government gets a bridge built, its engineer will have to inspect it to make sure it will not collapse. The government cannot be run without exercise of judgment, and often of compulsion. And if it is to be free of corruption, the civil servants who use judgment and force must be honest.
The commonest device to keep people honest is to impose checks on them. That is what the comptroller and auditor general is supposed to do. That, come to think of it, is also what Parliament is supposed to do. It has two committees — the Estimates Committee and the Committee on Public Undertakings — specially set up for this surveillance. To these, Manmohan Singh would like to add public-spirited citizens to keep a watch over public servants. But these ex-post checks are highly fallible. There is usually a convergence of interest between the corrupt official or minister and the man who bribes him. It is in the interest of both to conceal corruption. Hence all that greater surveillance can do is to generate more suspicion, fear and paralysis.
If you want an honest government, you have to have public servants who are innately honest, who admit only upright members and who throw out the dishonest amongst them for the ignominy they bring upon public service. What the prime minister should look for is a reconstruction of the civil service, and a set of ex-ante rules to prevent arbitrary and potentially corrupt ministerial decisions.