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Tackling Corruption: A Multi-pronged Approach

Vikram K. ChandThe World BankApril 21, 2005

The Anatomy of Corruption in India Corruption pervasive in India: India ranked

in ninetieth place on the TI index in 2004. Petty corruption hurt the poor the most Understanding corruption requires a focus

on the incentives that lead to corruption. Technical solutions (e-governance) by

themselves will not reduce corruption.

Electoral Incentives for Corruption Intense competition to win seats in

fragmented, multi-party contests Push up cost of campaigns and demand for

money to fund elections Funding by parties and individuals not

considered part of campaign ceiling costs under Explanation 1, Sec. 77, RPA.

Contributions by companies banned in the early 1970s, without alternative funding sources for parties in place.

Black Money and Politics Growing dependence on black money after

decision to suppress company contributions.

Congress Party accused in the 1980’s of securing money through defense contracts.

BJP depend heavily on smaller traders for funding.

Flow of black money into politics aided by over-regulation, complex tax laws, and desire for anonymity by donors.

Criminals Enter Politics Electoral corruption opened door to the entry of

criminals. Supreme Court in 2003 require all candidates to

release information on past criminal cases and assets/liabilities.

According to PAC Study: Nearly 25% of all MP’s had a case registered against

them in 2004. Four states accounted for 50% of all MP with cases

against. Regional Parties were more prone to criminalization

than national parties. Question: Do such politicians have an incentive to reform

the system?

Impact of Electoral Corruption Electoral ‘upstream’ corruption induce

corruption further ‘downstream’ as well especially in public administration.

Posts in lucrative ministries bought and sold routinely.

Procurement focus of corruption especially large infrastructure projects.

Rent-seeking pervasive in service delivery.

The Problem of Transfers Market in buying and selling of

posts. Source of patronage for politicians. Frequent transfers hurt service

delivery. Make administering development

projects more difficult.

A Typical Development Project

Rural Women’s Empowerment and Development Project

(1998-2001)

State Number of

MDs Average tenure

(in months)

Bihar 3 8

Gujarat 7 3.1 Karnataka 4 6 MP 4 6 UP 5 4.8

Source: e: Rao Seshadri (2003)

Aggregate Transfers, Karnataka, 2000-05

Total Group A, B, C and D Transfers - Government of Karnataka (2000-2005)

16798

30275

34017

54333

8211

0

10000

20000

30000

40000

50000

60000

00-01 01-02 02-03 03-04 04-05 (April-Sept)

Year

Em

plo

yees

in T

ho

usa

nd

s

Controlling Transfers

Cadre management committees. Quantitative caps on transfers. Computerized transfer process. Mass transfers reduced –

sustainable? Less success in controlling elite

transfers. Can GOI frame rules to encourage

stable tenures at the state level?

E-Governance

Important tool to reduce corruption and improve service delivery

50% of all e-governance projects fail (OECD). What explains success?

Political Champions. Departmental capacity and drivers. Process re-engineering along with

computerization.

Registration in Maharashtra Highly corruption department by reputation Chief Secretary/Chief Minister want reform to

show Maharashtra could compete with Naidu. Stable tenure for new IG, Stamps, N. Kareer. New IG begin with consultation; then BPR

including redefining service standards, reducing discretion, new software program to calculate guidance values, and public-private partnership.

PPP raise funds, inject new skills, facilitate better performance management.

Results of Registration Reform Major Decline in Corruption: Only 8%

said they paid bribes in Maharashtra Less Reliance on Touts: Only 40% got

help compared to 94% in Karnataka. 75% said behavior of staff was polite. Time taken to register a document

fall to just 30 minutes.

Computerized Checkposts in Gujarat Inter-state check-posts important

source of revenue for government. Massive leakage at checkposts. Reformer posted as Transport

Commissioner begin change in 1999. E-Governance introduced on a

massive scale using a PPP model.

CCIP: The Empire Strikes Back Project bedeviled by Tenural Instability. New Chief Minister less supportive. PPP model unravel. Technology switched off and bypassed. Corruption continue unabated. Price of an Inspector’s post – two crores

in political marketplace.

Access to Information Rajasthan: Public hearings to encourage

dissemination of critical information. Government respond with legislative

changes including new RTI law. Delhi pass RTI law in 2000: Strong support

of CM. NGOs use it widely to cut corruption in PDS

and other services. Citizen-friendly Public Grievances

Commissioner hear appeals: Of some 4, 000 requests for information filed in 3 years, some 1, 200 appeals resulted of which 75% were granted.

Report Cards in Bangalore

Public Affairs Center (PAC) conduct three report cards on city services.

Report cards prod agency reformers into action, mobilize public pressure.

Report cards not a magic bullet.Can GOI promote use of report cards for agencies at the national and state levels?

Improvements in Satisfaction: Public Services in Bangalore.

 

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34 34

16

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73

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1994 1999 2003

Source : PAC

Large Decline in Corruption Corruption across Three Report Cards

14 9

3219

22

25

0

20

40

60

80

100

1994 1999 2003

Year

% w

ho

pa

id

General Households Slum

Source: PAC

Karnataka’s Lok Ayukta: Focus on Service Delivery Most powerful of 16 Lok Ayuktas in India. Investigations:

Drug adulteration Public hospitals (absenteeism,

exploitation) Transport and registration departments. Corruption in municipal government

Wide publicity may be the best way to check corruption when courts don’t work...

Lok Ayukta In Action

Reforming Elections Clubbing party and individual

expenses with candidate expenses under ceiling.

Broad-base contributions to prevent a few donors from dominating. Risk of capture.

More transparency in disclosure: Parties have still not identified donors in 2004.

What about Public Funding? Public funding reduce pressures for

extraction from system. Media time already subsidized under

new legislation. Public funding work only if parties

democratized internally with penalties for mismanagement.

Public funding financed by closing MPLAD.

Anti-corruption Enforcement End Single-Directive and vest permission

to prosecute with an independent body. Reform article 311 to make it easier to

discipline corrupt civil servants. Discourage the fragmentation of anti-

corruption institution. Judicial Reform to speed up case disposal

and check corruption in the judiciary.

Sparking Demand for Change Encourage the wider use of report

cards. Pass amended Right to Information

law for the country with stiff penalties and universal application.

Government schemes to reflect community priorities and be implemented by the community rather than bureaucratic priorities.