Pethe, Abhay and Tandel, Vaidehi and Gandhi, Sahil (2012): Unravelling the anatomy of legal corruption in India: Focusing on the ‘honest graft’ by the politicians. Published in: Economic and Political Weekly , Vol. 47, No. 21 : pp. 55-62.
Download (507kB) | Preview
Corruption in India is ubiquitous and may be broadly identified as illegal and legal. This paper delves into the typology of legal corruption in India, which, apart from abuse of discretionary power, and tactical law and policy making, also includes – not so well documented – use of information advantage and the externality impact of such information by politicians to make gains. The paper, by analyzing the growth rates in assets of some politicians in the Mumbai Metropolitan Region, finds that the elected politicians experience a higher growth in their assets as compared to the market growth. The findings strongly support the existence of this form of legal corruption in India. The paper recommends that practices of ‘misuse’ of information advantage by politicians to make legal gains could be reduced by enforcing greater transparency via dissemination of relevant information in public domain. These measures must be backed by broad based reforms – that are commensurate with the current level of economic development – that would bring about system-wide changes in an effort to lower overall corruption in the country.
|Item Type:||MPRA Paper|
|Original Title:||Unravelling the anatomy of legal corruption in India: Focusing on the ‘honest graft’ by the politicians|
|Keywords:||Corruption; asymmetric and private information; private gains|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
|Depositing User:||Sahil Gandhi|
|Date Deposited:||07. Jun 2012 23:56|
|Last Modified:||13. Feb 2013 05:48|
Ahmad, N and O Brookins (2004): “On corruption and countervailing actions in three South Asian nations”, Journal of Policy Reform, 7(1): 21–30.
Aidt, T S (2010): “Corruption and Sustainable Development” forthcoming in: (Susan Rose- Ackerman and Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume, 2 (Cheltenham UK: Edward Elgar).
Aidt, T S (2009): “Corruption, institutions, and economic development”, Oxford Review of Economic Policy, 25(2): 271–291.
Aidt, T S, J Dutta and V Sena (2008): “Governance Regimes, Corruption and Growth: Theory and Evidence”, Journal of Comparative Economics, 36(2): 195–220.
Alt, J E and D D Lassen (2003): “The political economy of institutions and corruption American states”, Journal of Theoretical Politics, 15(3): 341–365.
Bardhan, P (2006): “The economist’s approach to the problem of corruption”, World Development, 34(2): 341–348.
Bardhan, P (1997): “Corruption and Development: A Review of Issues.”, Journal of Economic Literature, 35(3):1320–1346.
Basu, K (2011): Why for a Class of Bribes The Act of Giving a Bribe should be Treated as Legal, Ministry of Finance, Government of India.
Bertrand, M, S Djankov, R Hanna and S Mullainathan (2007): “Obtaining a Driver’s License in India: An Experimental Approach to Studying Corruption”, Quarterly Journal of Economics, 122(4): 1639-76.
Bhattacharyya, S and R Jha (2009): "Economic Growth, Law and Corruption: Evidence from India." Canberra: Australian National University.
Charron, N (2010): “The Correlates of Corruption in India: Analysis and Evidence from the States”, Asian Journal of Political Science, 18(2): 177-194.
Djankov, S, R La Porta, F Lopez-de-Silanes, and A Shleifer (2010): “Disclosure by Politicians,” American Economic Journal: Applied Economics, 2(2): 179-209.
Economic Times (2010): “A Raja’s assets nearly doubled in last fiscal”, TNN, 23 November.
Express India (2003): “EC issues new guidelines; candidates to declare assets, criminal cases”, Express India, 31 March.
Gardiner, J (2002): “Defining Corruption”, in A. Heidernheimer and M. Johnston (ed.) Political Corruption: Concepts and Contexts, (New Brunswick, NJ: Transaction Publishers), 25–40.
Goel, R and M A Nelson (2010): “Causes of Corruption: History, Geography, and Government,” Journal of Policy Modeling, 32(4): 433-447.
Glaeser, E L, and C Goldin (2006): Corruption and reform: An introduction, in Edward Glaeser and Claudia Goldin (ed.), Corruption and reform: Lessons from America’s Economic History (Chicago, IL: The University of Chicago Press).
Heston, A and V Kumar (2008): “Institutional Flaws and Corruption Incentives in India”, Journal of Development Studies, 44(9): 1243-1261.
Heywood, P (1997): “Political corruption: Problems and perspectives”, Political Studies, 45(3):417-433.
India Today (2010): “Is NREGS a loot scheme?”, India Today, 15 April.
Jain, A K (2001): “Corruption: A Review”, Journal of Economic Surveys, 15(1): 71–121.
Johnston . M (2001): “The definition debate: old conflicts in new guise.” in A Jain (ed.) The Political Economy of Corruption, (London: Routledge), 11-31.
Kunicová, J (2006): “Democratic institutions and corruption: incentives and constraints in politics.” In S Rose-Ackerman (ed.), International Handbook on the Economics of Corruption (Cheltenham, UK: Edward Elgar), 140–160.
Kunicova, J and S Rose-Ackerman (2005): “Electoral Rules and Constitutional Structures as Constraints on Corruption”, British Journal of Political Science, 35(4): 573–606.
Kurer, O (2005): “Corruption: An Alternative Approach to Its Definition and Measurement”, Political Studies, 53(1): 222–239.
Laffont, J J (2000): Incentives and Political Economy, (Oxford, Oxford University Press).
Lambsdorff, J G (2007): The Institutional Economics of Corruption and Reform, (Cambridge, UK: Cambridge UP).
Lancaster T D, and G R Montinola (1997): “Toward a Methodology for the Comparative Study of Political Corruption”, Crime, Law And Social Change, 27(3-4): 185-206.
Lederman D, N V Loayza, R R Soares (2005): “Accountability and Corruption: Political Institutions Matter”, Economics and Politics, 17(1):1–35.
Lee, S H and K Oh (2007): “Corruption in Asia: Pervasiveness and arbitrariness”, Asia Pacific Journal of Management, 24(1): 97-114.
Lessmann, C and G Markwardt (2010): “One size fits all? Decentralization, corruption, and the monitoring of bureaucrats”, World Development, 38(4): 631-646.
Mauro, P (1995): “Corruption and Growth”, Quarterly Journal of Economics, 110(3): 681–712.
Mauro, P (1997): “Why worry about corruption?”, Economic Issues No. 6. (Washington D.C.: IMF).
Mauro, P (2004): “The Persistence of Corruption and Slow Economic Growth.” IMF Staff Papers 51: 1.
Menes, R (2006): “Limiting the Reach of the Grabbing Hand: Graft and Growth in American Cities, 1880–1930” in E L Glaesar and C Goldin (ed.) Corruption and Reform: Lessons from America’s Economic History (Chicago: University of Chicago Press), 63–93.
Méon, P-G and L Weille (2010): “Is Corruption an Efficient Grease?”, World Development, 38(3): 244-259.
Méon, P-G and K Sekkat (2005): “Does corruption grease or sand the wheels of growth?”, Public Choice, 122 (1): 69–97.
Mo, P H (2001): “Corruption and Economic Growth”, Journal of Comparative Economics, 29(1): 66–79.
Montinola, G R and R W Jackman (2002): “Sources of Corruption: A Cross-Country Study”, British Journal of Political Science, 32(1):142-170.
Paldam, M (2002): “The big pattern of Corruption: Economics, culture and the seesaw dynamics”, European Journal of Political Economy 18(2): 215-240.
Pelligrini, L and R Gerlagh (2004): “Corruption’s Effect on Growth and Its Transmission Channels”, Kyklos, 57(3): 429–456.
Persson, A, B Rothstein and J Teorell (2010): The failure of Anti-Corruption Policies. A Theoretical Mischaracterization of the Problem. QoG working paper 2010:19
Peisakhin, L and P Pinto (2010): “Is transparency an effective anti corruption strategy?”, Regulation and Governance, 4(3): 261-280.
Pethe, A (2010a): Collusion, Conflicts, Informal Systems & Rent Seeking: The Great Prototype Indian Story Of Urban Land Management in Mumbai. Synthesis report of a study undertaken for World Bank presented at Urban Design and Research Institute, Mumbai on 10th December 2010.
Pethe, A (2010b): Contextualizing Land Management Issues within the framework of Urban Governance: Case of Mumbai, Presentation at the International Workshop on Expanding Land Access, World Bank, Washington DC. (http://siteresources.worldbank.org/INTHOUSINGLAND/Resources/339552-1272658002920/Pethe.pdf).
Pethe, A, S Gandhi, and V Tandel, (2011): “Assessing the Mumbai Metropolitan Region: A Governance Perspective”, Economic and Political weekly, 46(26&27): 187-195.
Philp, M (1997): “Defining political corruption”, Political Studies, 45 (3): 436–62.
Quah, J (2008): “Curbing Corruption in India: An Impossible Dream?”, Asian Journal of Political Science, 16(3): 240-259.
Reuters (2010): “India hit by another major corruption scandal”, Reuters, 25 November.
Rose-Ackerman, S (1975): “The Economics of Corruption,’’ Journal of Public Economics, 4(2): 187–203.
Rose-Ackerman, S (1978): Corruption – A Study in Political Economy (New Haven, CT: Academic Press).
Rothstein, B (2011): “Anti corruption: The Indirect Big Bang Approach”, Review of International Political Economy, 18(2): 228-250.
Singh, G (1997): "Understanding Political Corruption in Contemporary Indian Politics", Political Studies, 45 (3): 626-638.
Shah, A (2007): Tailoring the Fight against Corruption to Country Circumstances. In Performance Accountability and Combating Corruption, edited by A. Shah, 233–254.Washington D.C.: World Bank.
Shah, A (2006) “Corruption and Decentralized Public Governance”, World Bank Policy Research Working Papers, no. 3824.
Shankar, S, R Gaiha, and R Jha (2010): “Information and Corruption: The National Rural Employment Guarantee Scheme in India.” ASARC Working Paper Series (Canberra: Australian National University)
Swaleheen, M (2011): “Economic growth with endogenous corruption: an empirical study”, Public Choice, 146(1-2): 23-41.
Tanzi, V (2006): “Corruption and Economic Activity”, Distinguished Lecture Series 26, Egyptian Center for Economic Studies.
Tanzi, V (1998): “Corruption around the World: Causes, Consequences, Scope, and Cures”, IMF Staff Papers 45(4): 559–94.
Tanzi, V and H Dawoodi (1997): “Corruption, public investment, and growth,” International Monetary Fund, Working Paper No. 139.
The Hindu (2011): “Yeddyurappa declares 18 acres of farm land”, The Hindu, 6 February.
TOI (2010): “Mayawati’s assets rise from Rs. 52 crores to Rs. 87 crores in 3 years”, Times of India 27 May.
ToI (2008): “Indian companies prefer to bribe low-level officials: Survey”, Times of India, 11 December.
Tummala, K (2009): “Corruption in India: Can it be controlled?”, in Clay Wescott, Bidhya Bowornwathana, Lawrence R. Jones (ed.) The Many Faces of Public Management Reform in the Asia-Pacific Reg (Emerald Group Publishing Limited), 45-72.
Véron, R, G Williams, S Corbridge, and M Srivastava (2006): “Decentralized Corruption or Corrupt Decentralization? Community Monitoring of Poverty-Alleviation Schemes in Eastern India”, World Development, 34 (11): 1922-1941.
Wei, S-J (1999): Corruption in economic development: Beneficial grease, minor annoyance, or major obstacle?, World Bank Policy Research Working Paper 2048, The World Bank.
Weinstein, L and X. Ren (2009): “The Changing Right to the City: Urban Renewal and Housing Rights in Globalizing Shanghai and Mumbai”, City and Community, 8(4): 407-32.