Sunday, December 19, 2010

When C Equals M + D - A

It’s been incredibly mind-boggling these past few months. The CWG scam, the Adarshgate scam, the 2G Spectrum scam, the Karnataka land scam – the litany is endless; every bit surreal and growing. Lest anyone has any qualms about a humble unelected and unelectable individual like me making bold to touch upon these touch-me-nots, question-me-nots, let me say it upfront that I write this as a citizen and that I have an inalienable right and a bounden duty to do so. So please be disabused, you the eminent sons of this country who flaunt and parade patriotism on your shirt sleeves and on television studios, rolling out spiels of pious homilies to lesser mortals like me!

By any facile definition, corruption is immoral, it is illegal, it is illicit, it is illegitimate; no country has legalized bribery, graft, extortion, pelf, embezzlement, fraud, or nepotism. But peel off the epidermis that masks these abstractions and semantics, and you’ll see that corruption is also a crime of cold immoral calculus. Individuals weigh the benefits/costs of giving and taking bribes. They include moral costs shaped by individual consciences, social values, cultural norms, and ethical standards; they subsume economic calculations including costs of the illegal transactions.

Shorn of morals or attitudes, this is as true of the private sector as the government or the NGOs. Competition is less vulnerable to corruption than monopoly. Clear rules of the game are less susceptible to corruption than systems where discretion is paramount. Systems with accountability are less prone than systems whose lack of transparency readily lends to questionable operations. As Robert Klitgaard, an international expert on the issue of corruption says, “Corruption is more pronounced in systems characterized by the formula C = M + D – A: corruption equals monopoly plus discretion minus accountability.”

Put the three magnum scams through this sieve. The CWG scam stemmed from the monopoly of the Organizing Committee to do what its high priest and his cohorts willed or desired, giving the processes a go by. The discretion was not spelt out; there was simply no accountability. It was banana republic at its worst. The Adarshgate was everything that CWG was – and more. It was a criminal conspiracy, hatched with admirable planning and flawless networking. Discretion became the Dictator and Accountability crushed asunder. The conspiracy threw up its own Monopoly. How else would you expect the high and mighty to hide behind the fig-leaf of Kargil martyrs! It was not only a criminal conspiracy but the greatest shame that could have attended the armed forces. The 2G Spectrum scam was indeed sui generis. The unholy nexus among politicians-bureaucrats-corporates-media was caused by Monopoly with limitless Discretion and no Accountability.

How must we begin? First, promote competition. But willy-nilly there shall be certain monopolies that can’t be wished away – a nation’s natural and electromagnetic resources – and inevitably has to stay with the government. When Monopoly is inevitable, Discretion needs be circumscribed and Accountability total. In the case of 2G spectrum scam, Discretion, far from being carefully delineated, was given the freest and wildest run, and Accountability didn’t exist.

What must we do? As Klitgaard says, “Corruption is a crime of economic calculation. If the probability of being caught is small and the penalty is mild and the pay-off is large relative to the positive incentives facing the government official, then we will tend to find corruption. Fortunately, economic analysis suggests that it is possible to locate areas within an organization where corruption is most likely. A heuristic formula holds: Corruption equals monopoly plus discretion of officials minus accountability.”

Given human nature, there will be the impulse to improve one’s lot in a society that values hedonism – even when it is not legal. This kleptocratic instinct may not hold fast for all but surely for the majority. Consequently, officials will veer towards corruption when the ostensible gain from corrupt means far outstrips the penalty imposed times the probability of being caught times actually punished.

How, then, to limit corruption? It could be broadly two-fold: Institutional mechanism and strong punitive action. The obvious institutional thing is to reduce monopoly to the limit possible, circumscribe discretion and temper it with transparency, and enhance accountability. Hong Kong’s Independent Commission Against Corruption (ICAC) is a kind of super-body against corruption. It combines investigation, prevention, and popular participation – all rolled in one.

The other aspect relates to exemplary punitive action. Klitgaard suggests picking the low-hanging fruits – selecting a type of corruption “where visible progress can be made soon, without too great a cost”. This would help making a statement that rings through the citizens’ psyche – that the corrupt shall not walk away free.

Coupled with this, there is a need to upset the applecart of the pernicious culture of impunity – to disabuse citizen’s mind that has, over time of inactivity against corruption, become jaded and defeatist. Corruption today is not only tolerated but has come to be accepted as a way of life, a modus vivendi that has to be lived with.

This can only happen if the Big Fishes are fried. As a former Hong Kong’s ICAC Commissioner wrote: “An important point we had to keep in mind is the status of people we prosecute. The public tends to measure effectiveness by status! Will they all be small, unimportant people, or will there be amongst them a proportionate number of high-status people? Nothing will kill public confidence quicker than the belief that the anti-corruption effort is directed only at those below a certain level in society.” Italy’s success in its fight against corruption was largely due to frying a top Mafia official, many top business executives, and several important politicians from the ruling party. This would make a splash; big guns have high visibility, and more the frying the more the message conveyed.

The suggestions presuppose ringing in changes by simplifying laws, protocolizing procedures, and making processes transparent. Sadly, what we suffer today in India is not a lack of rules but a surfeit of them, with each caught up in tangles that makes legal interpretations – and consequential adjudicatory processes long-winded and endless – so cumbersome and infuriatingly exasperating that dares even to trivialize the constitutional performance of an august institution of Comptroller and Auditor-General.

The Big Three – CWG scam, the Kargil for Profit Adarshgate scam, the 2G Spectrum scam provide us with material that would make for excellent case studies – much like an articulated skeleton enabling medical students to understand human anatomy – to anatomize and educate the public. Given the outrage, they could be made the cornerstone for cleansing the system. Each one needs to be analyzed threadbare to lay bare how the processes were subverted and suborned and the nation deprived of its resources.

11 comments:

  1. An eye opener. I think we need to streamline all processes to reduce corruption that is sweeping us off our feet and life. Punishment should be quick and exemplary. All big names must be fried, deep and long.

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  2. Your mathematical analysis of corruption leaves one aspect of being in power and authority which only contributes to the A.
    Hence I think this expression co-efficient added to as [alpha] to A, alpha inversely proportional to authority held
    C=M+D-αA

    Hope you will agree

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  3. Thank you for your article. While, your courage is admirable, I am sorry, there are no takers to your just views. There was corruption from the start of civilization which shall continue up to the end.

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  4. Just finished reading your article. It gave a feeling of reading an analysis by a sociology professor.

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  5. Just finished reading your article. It gave a feeling of reading an analysis by a sociology professor.

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  6. Wanted to share some thoughts with you.

    All the talk about Ceaser's wife being above suspicion is amusing to say the least.

    The idea is that EVEN Ceaser's wife should be above suspicion. It is taken for granted that Ceaser is undoubtedly above suspicion.

    In this case, is the Prime Minister of India the equivalent of Ceaser or Ceaser's wife? If he is Ceaser's wife, then who is Ceaser? Madam Gandhi? Is it a candid admission on the part of the Prime MInister?

    The way these two are going about the biggest corruption scam ever, they seem to be oblivious of their sins.

    It reminds the scene in Macbeth where he says that all the waters of Neptune cannot wash his hands clean and Lady Macbeth says she is able to do it with a Jar of water.

    The PM and his boss can decide between the two of them who is Macbeth and who is Lady Macbeth in this case.

    Just wanted to share my thoughts with someone, who I thought, would understand.

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  7. I congratulate you on your article.However this problem is much more deep-rooted and widespread than you think.

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  8. Mr Sudhansu Mohanty,

    May ur tribe increase.Oh Boy, what an article!!

    Reminded me of collage days understanding what Calculus is all about. U hv solved the equation aptly/admirably or is it ok if i say QED(Quite Easily Derived)as we usually close the answer to any Bookwork.

    Your phrases such as the "defending the indefensible" and "unelected and unelectable individual" is good slap on the loud and the twisted mouths of the spokespersons of the so called ruling coalition party.(I am sure u got whom i am referring to).

    They keep repeating that they have ZERO tolerance for Corruption.My humble comment is: in 1989 Bofors scam was a small change of rs 60,00,00,000 but their tolerance of Zero went upto rs 1,76,000,00,00,000 in 2G scam. After all it is the Great Indian Mathematician who invented ZERO and his contribution to science
    and maths is not being forgotten by the ruling elite who has reduced AAM ADMI,repeat the unelected and the unelectable like u and me to keep chewing only zeros while their swiss bank balance will b swelling in zeros after 1.

    Even Chengez Khan and Timur who invaded India 1000 years Back for 18 times and repeatedly transferred or looted our wealth will be turning in grave after learning about our present day rulers booty.

    My only concern is whether the 2G's(7th Grade MotherG and the 8th Grade SonG) will understand ur Calculus formula which is difficult by any standard to high school students or will they refer it to EGOM(empowered group of ministers
    viz; mr chidu,sibal,pranab headed by chairman MM singh} for understanding ur famous formula nd recommend solutions!!!!!!

    I have taken pretty long time of urs and love to hear from u when ur free few lines of your journalistic comments.

    By the by, please continue your efforts to publish such revelling articles to educate the unelected and the unelectables!! We r with u, sir, to take on these loud mouthed MTs(emptees and chamchas of the CHACHAs) dynasty.

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  9. Pratap Keshari NaikDecember 22, 2010 at 7:23 PM

    Your formula C = M+D-A is well proved & worth preserving.

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  10. A difficult-to-understand theoretical exposition of the corruption. Anyway, it has relevance to the present context. Monopoly plus discretion minus accountability result in corruption. The scale in which it is organized and the sheer magnitude of it, numb one's sensibilities. And goes beyond the simplistic formula. Massive corruption of the type of 2G scam, has no precedents. It has arisen out of a convoluted functioning of democracy. With power being shared by political parties on a basis that deprives the PM (primus-inter-pares) of his setting right errant policies and partners practicing them. As if this is not enough, the top of the pyramid , an authority dictating the functioning with no accountability. The dictum that absolute power corrupts absolutely, is more true today.Qualitatively, our practice of ethical governance, has taken a deep dive, despite of our quantitative high pretensions to democracy.

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  11. The average government employee is no better than a pickpocket who would not move a file without adequate bribe. He/ She thinks that bribe is the mainstream earning and salary is pocket change. The few exceptions will always rot in a corner piling papers watching the cancer eating into the system. The cure is a shock treatment. A punishment so severe that the person should think before doing anything illegal. Madoff suffers a 150 years jail term and all his property were confiscated. The Indian minister with his billions of ill gotten wealth with live in airconditioned comfort and holiday resorts if he ever were to leave his ministerial berth. Shame on Indians!

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