Is
corruption a failure of personal morality?
Are
the non-corrupt abiding by higher moral standards than the so called corrupt?
It is
important to understand that there is no straightforward answer to these
questions.
Human
behavior reflects the balance of several forces - personal ethical standards are
certainly among them. But there are other very powerful forces - economic
incentives and social norms being the two most important. Depending on
circumstances, one or the other may win when the forces are in conflict. The
Indian president believes that simply building up strong personal ethics through
education would change behavior. I, like many of you, am justifiably sceptical.
I
think it is far more important to understand and change the economic incentives
and social norms that give rise to corruption. One of the key aspect of
this is that social phenomena such as corruption suffer from a certain "lock-in"
feature.
Let me
explain by talking about something simpler. Take punctuality - a fine trait,
even a good moral attribute one might say. Some societies such as the
Scandinavian are amazingly punctual; others such as the Spanish are almost as
strongly non-punctual. If you are not punctual in Norway, you will be in serious
trouble. You will arrive late, cause amazing embarassment to yourself, miss
meetings and engagements and earn huge business losses. You will also face much
social derision and lose social standing. In fact, in Norway, it will be taken
as a signal of your unproductive nature, your lack of collegiality and lack of
respect for others. Thus, even the most tardy Spaniard learns to be punctual in
Norway. And the same applies for every individual Norwegian. Thus we have a
social equilibrium of puntuality from which no individual can deviate without
social and economic penalties - society is "locked-in" it (like the way a
tapestry is woven).
In
Spain, the equilibrium is different (to put it mildly). If you
are puntual in Spain, you will cause great embarassment to your hosts. You
will walk out of meeting just as they begin, in order to meet your
obligation to be at another meeting and will find that the latter only
begins an hour or two later. You will rudely interrupt long lunches. You will be
a pain. And invite social derision, business losses. You will learn to be
nonpunctual in your own interest. And the same holds for most individual
Spaniards. A social equilibrium of non-punctuality from which individuals
have no personal incentive to deviate - society is "locked - in" it.
Of
course, we all know puntuality is better than non-punctuality. But shall we
look at the Spanish behavior as a failure of personal ethics? Is it a failure of
their education? Will telling Spaniards in classrooms and television and on
networks of Spaniards abroad to be punctual - will that help? Perhaps not.
The
same, I submit, is true of corruption. Society, for historical reasons, gets
locked in to a bad equilibrium. No amount of lecturing and theorizing, can
change individual behavior until the bad equilibrium breaks down and a good
equilibrium is formed. The latter is the true meaning of social
change or institutional change. It requires tremendous coordination among
individuals and it requires new incentives to replace the old.
I
remain steadfast in my belief that like many other problems, this one too can be
tackled by a two pronged approach. At the political level, through genuine
decentralization, through democracy at the local level, through empowerment of
the locals. At the economic level, through reduction in the size of the
public sector, gradual elimination of all dicretionary powers of the state
and transfer of the absolutely necessary government economic functions from
federal to state governments and from state to local self government,
in that order. When the road next to my house is managed by my city
or nighborhood government, the social monitoring and the sanctions that
officials will face from leakage of funds will be of a different order of
magnitude and the incentives of individuals like me to storm these officials
frequently will also be very different.
Santanu.
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