An agenda in search of a movement

Corruption in India: Agenda for Action; (Eds) S. Guhan and Samuel Paul; 1997 Vision/Orient, New Delhi; Rs.285 ($25)

TO all intents and purposes, India is the most robust of Third World democracies with most of the formal elements of good governance: a pluralist democracy, a market economy, a state intended to be developmental, a functioning civil society, institutions of free association, acknowledgement, at least in law, that transparency and information are the gateways to accountability. Yet, according to the Berlin-based NGO, Transparency International, India has the dubious distinction of being bracketed along with China and Indonesia, the world's most corrupt countries. This means that just under half the entire world's population has to contend with, and to fear, levels of corruption which distort all the items on the governance checklist.

Corruption in India is an old colonial phenomenon, beginning with British administrators "making capital out of the system". Anti-corruption law and institutions have long histories. Modern political corruption dates from the freedom movement in the 1920s. It thrives on secrecy. The Indian Evidence Act, no less than 125 years old, would still provide opportunity for a modern court to decide the scope of the public's right to inspect. The Official Secrets Act of India (1923) is a clone of Britain's 1911 Act but, unlike the latter, it remains unrevised, despite decades of effort. The Prevention of Corruption Act, 1947, along with other provisions of criminal law, makes corruption among 'public servants' a serious criminal offence and provides for stiff punishment. But until recently, it was kept in virtual abeyance so far as delinquent legislators and Ministers were concerned.

In the last decade, however, corruption in India has 'gone ballistic'. The key players seem safe, heavily protected as they move around or hiding in safe bunkers. There are few convictions for corruption (only one Minister to date). Commissions of Inquiry to establish political accountability have degenerated into political weapons. As the economy is engulfed by monetisation, the currency of corruption is ever more diverse: property, female bodies, alcohol, postings, educational privileges, foreign travel as well as the mundanity of cash. Despite the existence of a legal framework in which the legislative controls the executive, control actually works the other way round.

This state of affairs was the provocation for a corruption project directed by Samuel Paul, chairman of the Public Affairs Centre in Bangalore, dedicated to improving governance, and S. Guhan, Professor Emeritus of the Madras Institute of Development Studies, known for his integrity, administrative competence and intellectual clarity (see obituary: Frontline, March 20, 1998). In their book, in the place of conventional, endless, unproductive handwringing, nine senior writers from law, academia, the Indian Police Service and the civil service give a frank, critical and authoritative account of contemporary India that should be required reading for anyone interested in political economy and development. The 'agenda for action' is both its outcome and its input into what they anticipate to be a new anti-corruption movement in India.

The book is a tour de force - particularly of the lawyer and journalist A.G. Noorani who writes a third of it, with analyses (which are both riveting and scholarly) of the history of public secrecy, of the ombudsman and of India's intransigent lack of public and political accountability.

The result is an unambiguous thumbs down on revisionist arguments trotted out by many defenders of corruption that it bypasses inefficiency and injustice, that it speeds efficient resource allocations and that it improves access. It may do all these things at the micro level but only for those with the resources and inclination. Corruption is not (and cannot be) confined to macro-economically virtuous realms. Corruption cannot be reduced, as is tried in economics, to problems of incentives or of principal and agent; the first because values other than private individual greed characterise the state, the second because the principal is in fact society which should not be set up for modelling as if it were an individual. As for inefficiency and injustice, they need tackling head on. Besides, they argue, corruption is quite simply morally unacceptable.

WHERE is the agenda coming from and going to? There seem to be four features of its approach that are distinctive. First, while the team members see that the nutrient base of corruption is excessive regulation, they argue that the "state cannot be wished away nor can it be expected to wither away" (Guhan, 20). This is the closest the authors get to the conventional rent-seeking state caricatured in new political economic theories about corruption - that is, not very close at all. As argued in the chapters by S.P. Sathe, the legal scholar, and by Samuel Paul and the industrialist and educator Manubhai Shah, certain other characteristics of the state (widespread discretion in public monopolies, the concept of accountability being a limited reporting relationship within the bureaucracy rather than a public duty; extraordinary secrecy about information) enrich this nutrient base.

Secondly, the book exudes scepticism about "cultures of corruption." The new era of Indian corruption is not just a product of peculiar values of caste or kinship - on a slippery slope to patronage - or of a culture of gifts - on a slippery slope to bribes. Such factors do not account systematically for what are thought (in the absence of any systematic data) to be the sites and trends in Indian corruption.

Thirdly, according to two distinguished former IAS officers, abuse is most serious at the top: "as the king so the people" (219). Madhav Godbole's graphic cradle-to-grave description of the degeneration of the civil service (he calls it 'politicisation') shows an elite service that is increasingly prevented from demonstrating competence, alienated, fearful and represented for the most part by cravenly docile service associations. Ramaswamy R. Iyer's similar exposure of the elite Audit Department reveals not only a set of problems associated with the legal and formal institutional frameworks - for instance, no audits on request - but also bigger sets of problems connected to its degeneration such as increasingly expansive interpretation of scope coupled paradoxically with declining rates of detection, and increasing delays in reports which anyway are not disseminated.

Fourthly, political corruption is the prime mover. Guhan coins the aphorism "politics has been corrupted and corruption has been politicised" (18). K. Ganesan, the expert on electoral reforms, writes: "Politics has now been perfected into a well organised profession or business where the investment brings forth manifold and profitable returns" (34). We wonder to what extent this is the self-fulfilling consequence of emphasising rational choice theories of politics to a generation of young administrators and politicians.

With respect to the first point about regulation, Paul concludes that deregulation "has reduced the scope for corruption in government" (294). But the evidence is clear that the scope and range of corruption has tremendously increased during the era of liberalisation. Godbole explains that the economic administration is as unaccountable and opaque as ever, the Finance Minister being responsible for liberalisation and no other Ministry being involved (83-4).

It is also not clear from the detailed evidence in the chapters, whether priority for the reforms is best ordered in terms of the payoff for corruption control (294, although no concrete suggestions are given), or in terms of reported incidence (in which case the revenue, police, education, health and public works departments come first, according to a study done in Karnataka) or in terms of contact with "the public" (although information on this is, almost by definition, severely lacking - the Essential Commodities Act, for instance, is hardly mentioned in the book).

FOLLOWING logically from the characterisation of the Indian state as embodying values over and above mere private greed, the role of incentives is generally underplayed. Rather than higher salaries, it is improvements in information, clarity in responsibilities, quality of performance and norms in the implementation of the rule of law that are stressed (146, 297). After all, the existence of grand corruption at the top does not depend upon low salaries. Yet Paul and Shah surprise the readers with the suggestion to capitalise on certain kinds of incentives and introduce two-tier service delivery systems (157) with premia for speed for those with "special needs" and free for ordinary citizens. Special needs means special capacities, which could intensify the social pressure to amass funds for bribes. If departments cannot plan to expand or if budgets are fixed or contracting, then the two-tier system will slow delivery to those without special capacities.

If the role of incentives is underplayed, so too is the role of disincentives: deterrence and punitive responses to corruption. The ex-Director of the Central Bureau of Investigation, C.V. Narasimhan, who raises this issue, deals only with organisational reform, though he does so clearly and comprehensively. In China, economic crime and corruption warrant the death penalty, in Saudi Arabia mutilation. We are certainly not arguing for that; the point is whether in India the punishment remotely fits the crime.

Secondly, the editors and most authors are critical of a "lessons from elsewhere" approach, arguing that since no global generalisations can be sustained about corruption1 , any reform to corruption in India has to be argued from an analysis of the 'complexity' and uniqueness of corruption in India. It means that analysis of anti-corruption campaigns and their politics is conspicuous by its absence. However, Paul and Shah's choice of contributory factors causing corruption borrows from the political economist Robert Klitgaard and is not specifically 'Indian'. And Noorani calls the project's bluff by deploying a comparative method throughout, using evidence and experience predominantly from British law and also worldwide when it is relevant and extending this to an exhaustive comparison of four Central bills and two types of State bills in order to establish the principles needed for the office of ombudsman. Although it requires another book, the nuts and bolts of anti-corruption campaigns in India and elsewhere need looking into.

Thirdly, the authors distinguish 'grand' from 'petty' corruption, assert corruption is worst at the top which is where they then start their agenda. Certainly huge scandals at the top have been unearthed. At the Centre: Bofors, the HDW submarine scam, the securities, sugar, urea, housing, petrol pumps, railways and telecom scams, the Jharkhand Mukti Morcha and the hawala scams. In the States: the fodder scam of Bihar, the Enron deal of Maharashtra, the cloth and school uniforms, colour TV sets, transport spare parts, steel doors, slippers, crematorium, furniture purchase and coal import scams of Tamil Nadu. As for lower down and further out in society, Paul and Shah assert that corruption in public service delivery - what they term "retail corruption" - does not attract public attention (144). But that depends on who your 'public' is: retail corruption clearly involves a lot of public practice! In a five-city study cited in the book, one in four people in Chennai and one in eight in Bangalore pay bribes when dealing with the administration, telecom or electricity. Among the urban poor, the frequency of bribing is universally greater than in the general population (151-3). While the money involved is likely to be smaller, the numbers of people involved are incomparably larger than with grand corruption. Retail corruption, as Robert Wade showed, was the case in the irrigation bureaucracy over a decade ago, may well shovel upwards from the rural base a system of tribute parallel to that of official revenue. Yet the team argues that there is no necessary connection between the causes of corruption at the top and the base - where low salaries suffice to explain it.

Paul and Shah think the episodic nature of retail corruption may explain public apathy about its reform (149). But no evidence has been marshalled to show that retail corruption is not now politicised or that fear of present or future reprisal rather than apathy explains the apparent public passivity. Corruption has been the top issue in general elections in 1989 and general and State elections in 1996 (where five major parties representing vastly differing ideologies converged on anti-corruption programmes). While mass support for the agenda is a necessary condition for reform, it is not sufficient because this support has to be sustained. Memories are short and, for the reasons given above, public outrage is hard to sustain in the wake of elections. In the past, anti-corruption movements have been at best single-issue movements that sidelined other political considerations and at worst acts of political revenge.

The fourth and last aspect of their approach concerns the exclusive focus on political corruption. It takes two to tango. Narasimhan notes in passing that corruption is 'actively abetted by unscrupulous businessmen' (251), the implication being that an anti-corruption programme led by political and administrative reform would make unscrupulous businessmen scrupulous. The reader will look in vain for a reckoning on how this would happen. The role of business in political and administrative corruption is sidelined in this project. Business associations are seen as at best ambivalent towards reform (304) and in an effort to turn poachers into gamekeepers, it is suggested that such associations provide a list of legal and institutional reforms to reduce corruption. In identifying Indian corruption above all as a political, legal and institutional problem, the team is rightly impatient with economists' obsessions with incentives. But the relation of corruption to the rest of society is seriously underplayed here, save for people's role as victims or potential activists. While not denying the value of this exercise, its boundaries (which make it a positive and tractable project rather than a counsel of despair) colour the story that is told. Corruption is unconnected from the oppressive exploitation of labour, economic crime, tax delinquency and evasion, the scramble for wealth, private corruption, the production of shortages, and rent seeking in markets (rather than the bureaucracy). These infect politics, and in turn get infected by politics.

THIS is not to argue that reform has not got to begin somewhere, it is not to deny the importance of an anti-corruption movement. The issue is that the idea that incremental change beginning with, and engineered by, law, politics and administration cannot be overridden by wider social forces of capital accumulation, is not entertained in the book - except as a bit-part player in explanations for the degeneration of institutions in the past. What is on the agenda for these powerful forces? If, as is argued in the book, politics has become a business - the business of corruption - the other side of the coin must be the politicisation and the corruption of business. Business has always had to have a process of primary accumulation gorging itself alongside more advanced forms of economic activity. Now in the 1990s, this savage side to capitalism has spread to become a massive economic force strenuously protective of the rights to which it has laid claim. At stake is the consolidation of control over capital for the foreseeable future. The detail of the book implies, but never quite gets to say outright, that the commercialisation of politics and administration is the way in which these capitalists control the political process. They do not have to enter politics directly. They might have to, if the agenda came into being.

That the agenda is mostly strategy and little tactics, is something of a problem. To be implemented, it requires the balanced and rational "divine providence" that was Adam Smith's original invisible hand. Since, as Narasimhan comments, regulation became politicised and the electoral process became monetised, the reform agenda needs to suggest ways and means to depoliticise regulation and demonetise politics. But how to get from here to there? What Guhan writes of reform to "moral values" could equally well apply to the entire agenda, namely, that they cannot be expedited on the basis of rhetorical appeals that urge their necessity (20). Noorani in particular gives chapter and verse on the endless procrastinations that have attended reforms to law and institutions. The project, however, is prescriptively silent on the politics of resistance. It is possible that both politicised regulation and monetised politics are symptoms of factors that might confound reforms or as in the past might have them implemented only to be ignored, captured, warped and in the historian Sudipto Kaviraj's now famous phrase, "transformed beyond recognition". The authors needed to tell us how the resistance of those who gain from corruption is to be pre-empted.

Perhaps, as with anti-corruption campaigns, that is another project.

All in all, this is a terrific, demanding and stimulating book that has so far received a tame reception in the press. What is to be done? First, it has to convince numerous interests in society at large, not only the chattering classes. It is an agenda in search of a movement. For this, it needs journalists, lawyers and political leadership (wish there were a Jayaprakash Narayan around)! It needs imaginative transformations into local languages. It needs turning into posters, simplification into soundbytes, debate on local radio, and TV and publicity in local newspapers. It now needs the spadework necessary for it to be owned.

Current events on the corruption front are uncoordinated.

Barbara Harriss-White is Director of Graduate Studies in Development, Queen Elizabeth House, Oxford University. Last year she edited Liberalisation and the New Corruption jointly with Gordon White.)

1. The exception perhaps being that advanced country have dealt with 'retail' corruption in the delivery of public services (Paul and Shah (145))

An anti-corruption planReforming the Indian state1. Politics*stop criminals from entering party politics

* enforce accounting discipline and transparency in political parties; set up an ethics and conduct committee for Parliament

*reform the compensation and privileges of politicians; stop discretionary allocations (telephone and gas connections, petrol pump allotments); end MPs' and MLAs' immunity from the Prevention of Corruption Act and their non-declaration of assets and income

* reform election funding (the state should fund elections; there should be ceilings on election expenses, a ban on donations from big business and the elimination of rigging)

*Commissions of Inquiry must ensure political accountability.

2. Bureaucracy*reorganise anti-corruption vigilance

*slow the velocities of transfer, especially of top officials

* facilitate whistle-blowing

*systematise ombudsmen (Lok Ayukt and Lok Pal) with constitutional status, independent staff and a juridical personality

*create civil service tribunals with inquisitorial procedure to hear appeals of departmental abuse against civil servants.

3. Regulative Law

*deregulate in a partial manner, not necessarily so as to dilute the regulative function of the state but to eliminate incentives for corruption

*prioritise deregulation by the extent of opportunity for controlling corruption

*develop detailed parametric instructions for discretionary decisions

*strengthen an independent Central Vigilance Commission supported by the Central Bureau of Investigation and give it nation-wide jurisdiction and a statutory base to facilitate coordination, prevent political interference and enable the pooling of intelligence pertaining to corruption.

Reforming Society1. Social Empowerment

* reduce the culture of secrecy and limit the power of public service providers with the reform of the Official Secrets Act based on the defence of the public interest.

*Introduce a Freedom of Information Act

*institute a system of bureaucratic standards and norms ('mission statements')

*decentralise resource allocations and service delivery

*strengthen the morals and the resolve of the "85 per cent of the public abhorring corruption," starting with the young.

2. Popular Regulation

*involve NGOs, religious groups and research bodies to publicise, intermediate and aid complaint

*encourage the press to investigate and publicise

*engage lawyers in public interest litigation and judicial activism

*challenge business lobbies to suggest specific measures to stop corruption between business and government.