Friday, August 5, 2011

"Harassment Bribe" and "Institutions"

Since the upsurge in the news of corruption in the country, I have been trying to stay stoic to these news and continue doing the daily job of being insync with the project related research. But this stoicism to the loud news' of corruption didnot stay long. As a first step, I thought to read the latest article written by distinguished professor, author, thinker Kaushik Basu titled - ""Why for a class of bribes, the act of giving a bribe should be treated as legal" - Ministry of Finance, Government of India, New Delhi - 1.

The article has been uploaded on the web for wider public reading and invoking thoughts on the minds of every Indian regarding the issue of corruption.

Professor Basu discusses of a particular instrument called "harassment bribe" in this article. In short words he has defined what are "harassment bribe" and when do they arise in a system. Typically it is a bribe which has to be given to a bribe taker to enable the bribe giver to claim and get access to something to which he/she is entitled to. Thus this bribe helps the giver to avoid the harassment and have a claim on his/her right to something. This something can be an asset or any property or any good over which the bribe giver has a full right and is being harassed by the bribe taker towards getting this right to access the property/good/or something tangible.

The article discusses of the incentive structures of the bribe giver, taker and the regulatory, legal paradigms in which harassment bribes get enhanced in a system. These bribes are rampant in several blocks of the system and in our day to day life. We as common Indian have observed, sensed situations where giving little bribe induces the bribe taker to act fast and provide the giver the right or the facility to which he/she is legally entitled.

In many of our day to day scenarios, from the bribe giver point of view, the act of giving the bribe has an incentive as it fastens the procedure of claiming the right and reduces the transaction costs thereby bringing efficiency in the functioning of the institutional systems in which the bribe giver and taker is operating. The taker becomes happy with the illegal payment and does the job and stops harassing the bribe giver by reducing the transaction costs for him/her.

The article by Prof. Basu suggests that if we can create a system where infomation disclosure of giving harassment bribes are made legal and with larger punishments for the harassment bribe taker in comparison to the giver, incentives for the bribe giver to disclose information will increase. Further it will create threat for the taker to not indulge in harassing people and get engaged in taking "harassment bribe". This will reduce the chances of occurance of the act of "harassment bribes" and can diminish the level of corruption in a system.

But this can only happen unless and until the bribe taker and giver collude. The chance of collusion will depend on the discounting of expected costs and benefits of collusion/non collusion by the giver, taker while being involved in the act of "harassment bribes". The article highlights about all these possibilities. Valuation of the expected costs and benefits for both the giver and taker will depend on time horizon of each of them. This time horizon will further depend on the political economy of the institutions and mechanism of operations that decides the nitti grities of the functional mechanisms of the institutional system in which these two individuals operate.

It is here, I believe that even if there is a legalisation of the disclosure of information of the act of giving "harassment bribe" and creation of legal structures that penalises the giver more than the taker, the system can still be marked by the same level of corruption with its sustenance. To put it simply if we ask - "Why does one harass another in terms of exercising his or her claims on something to which he/she is legally entitled?". Is it not linked to the human behaviour, psychology and moreover on the nature of institutions that facilitates one form of human behaviour over the other. The issue of role of institutions to promote the right ethics of not harassing people from exercising and claiming their rights therefore becomes important. So ideally, morality and ethics of the human behaviour regarding corruption and bribe taking should be questioned, regulated and necessarily changed to stop harassment bribes. But in a practical scenario with various constraints it is not possible to change the morality and ethics of every people of a country because of their different backgrounds and socio- cultural routes, constraints. This brings out the question that in terms of policy prioritisation what should be the objective - a) Should it be reform of the institutions to regulate the human behaviour or b) Should it be creation of norms, legal processes to facilitate transparent information disclosure to reduce the level of corruption as some degree of corruption will always stay unless and until in an idealistic situation all human beings are driven by perfect ethics, morality and stop harassing people and taking harassment bribes.

In terms of pragmatism for policy prioritisation, I think to reduce the level of corruption in the economy and the system, the way ahead might be to first change the functional and non functional operational instruments of the institutions. Incentive structures should be first embedded within the institutions and be regulated for effective, efficient operation. Once institution systems with embedded incentives for promoting efficiency, transparency seeking behaviour of human beings within the systems are in place and implemented to some extent, only then instruments of legalising disclosure of information of "harassment bribe" should be brought in. This will further enhance the efficiency of the operational mechanisms towards reduction of corruption in the institutions. Legalisation of "harassment bribe" without the initial institutional reforms through policies and legislations might not be able to reduce the corruption levels. So may be , first institutional reforms have to be brought in followed by legalisation of the "harassment bribe" wherever and if required.

Operational structures of the institutions under different political regimes have to be questioned and modified wherever necessary followed by thought provoking new ways of reducing corruption within the economy. One of the ways of that could be transparent informal disclosure norms supported through effective legal and regulatory frameworks and instruments. In this regard, the suggestion of legalising the "harassment bribe" is a thought provoking idea. Debates, discussions and effective actions following such debates surrounding these types of thought provoking ideas will help in constructing a new India in the days to come. But definitely for a country like India, only legalisation of "harassment bribe" wont be able to reduce the corruption levels unless and until they are complemented with very strong institutional reforms at all levels of governance.

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