Legal corruption is better than illegal corruption
Published by Ravikiran Rao March 11th, 2004 in GovernanceWhen I talked about legalizing corruption, I was thinking of payments to political parties. Recently the CII called upon its members to donate to political parties only by cheques and in accordance with the law.
Now whether they pay openly or on the sly, companies (or individuals or unions for that matter) are not doing it for high-minded purposes. They are doing it because they expect to influence their parties to implement the policies they favour. That is still corruption in my book. I don’t like it. My preferred solution is to reduce the powers of the government and restrict its ability to favour one section over the other.
But that is a long-term target that may take decades to achieve. In the interim, I would prefer it if the campaign contributions drama is played out in full view of the TV cameras rather than under the table, seen only Tehelka’s hidden camera. That way, we can keep tab of who is paying how much and who is influencing policy which way.
I want to distinguish this solution from the other innovative approaches I keep thinking of to eliminate corruption, but which I classify under “privatization”. For example, say that you wish to reduce corruption among Railway ticket examiners. Let’s say that they collect bribes instead of imposing fines and they make so much money collecting bribes that people pay bribes to become TTEs.
Here is a solution which will work on Mumbai’s local trains. Instead of recruiting TTEs, why not simply 1) auction off the posts to people(for an annual lumpsum amount perhaps), 2) Pay them no salary and 3) Let the TTEs keep the fines they collect? The TTEs can be given the authority to levy fines upto a specified maximum with the freedom to collect less if they wish.
That way the railways can actually collect the money they lose when the TTEs collect bribes rather than fines. TTEs will have an incentive to be efficient (actually they it even now) Because the amount being paid to the railways is a legitimate payment, people can get bank loans for it, so poor people aren’t discriminated against.
I am not claiming that this is a practical idea. I am just giving an example. It is probably a better idea to hand over this task to a private agency than auction posts the way I’ve discussed it. I just wanted to give an example of using the power of self-interest for good. The point also is that in the latter case, once the rules have been appropriately set up, “collecting bribes” is no longer wrong. In the former case, i.e campaign contributions, the contribution is still a bribe and hence wrong even when legal.
So that’s what I meant by “legalizing corruption”. The trouble is that I can’t think of other examples where I would go for this solution.
Your solution was proposed by “Cho” Ramaswamy - then playwright, now journalist and MP(?) - in his Tamil play “Muhammed Bin Thuglaq”.
The following things come to my mind…
1. I am not sure why you wanted to auction/privatize only the TTE posts. By doing this, and not privatizing the system (Railways), the immediate impact would be that the TTE post contractor will keep the fine for not buying a ticket with value Rs 5 as Rs 4 and collect the fine from all passengers. Thus he can sweep all the revenue that Railways would get at their cost! Am I missing something? Or did you mean something else? If you meant Privatizing Railways itself then “yeah, we can do that… but…”
2. And you use your first example to justify your title… i.e to show that legal corruption is “better” than illegal corruption (I guess)… But I fail to make out, in what way is it better… In your solution space, people will get to know who is paying what amount (now they can only guess who is paying and dont know what amount)… But how exactly does this make things better - and even if transparency is better, by how much? Do you really think this will impact their voting in a *sizeable* manner?
Swami, that is why I was proposing auctioning the posts. If the fine for not buying a 5 rupee ticket is Rs. 30 and lets say that the legal hassles of actually collecting the fine make it worth 25 bucks, a reasonable TTE can tell the passenger, “pay 25 bucks and we’re square.” That’ll be perfectly legal. It doesn’t matter to the railways because the TTE pockets the money legally. Because this right has been auctioned to the TTE, the TTE must have already paid the railways some amount less than 25 say 25-x Remember that the railways don’t pay him a salary anymore and because of the competition, you can be dead sure that the x adds up to less than the salary that it is paying the TTEs right now.
I am not actually proposing this solution. I am all for privatising the railways, and if it is just a question of privatising ticket collection, it will probably be a better idea to auction off the rights to collection agencies than to individuals.
Ravikiran, two questions:
Firstly, do you have a reason corruption and ticketless travel is much more prevalent on the railways than on (government owned) buses?
And secondly, have you ever read the Discworld series by Terry Pratchett? That takes legalised corruption to, eh, interesting extremes.
The answer to the second question is no.
As to the first question, I am not sure. I am not even sure if ticketless travel is in fact more prevalent on the railways than in buses. I’ve heard that in many rural areas, it is kind of accepted to bribe the conductor.
I guess tradition plays a role. No one bribes in Mumbai because they’ve got into the habit of enforcing rules right from the time of the British. Once a conductor committed suicide because he was suspended after some extra money was found in his satchel.
Then there is the factor that it is easier to get away with it - There are fewer TTEs as a proportion of passengers than conductors.
Of course, shortages also play a part.
In the region I travel (NH-1 from Delhi to Rajpura, and then on to Patiala), ticket collection on PRTC (Punjab Roadways) as well as Haryana Roadways is pretty stringent, no bribes. I don’t know about the rural areas, of course. On the same route, travelling ticketless, or paying a hundred rupees to the TTE for an AC Chair Car seat is pretty much accepted on all the trains.
You’re right, though. Shortages would probably be the most important factor. The bus service is frequent enough that you won’t ever have to wait more than fifteen minutes for a seat.