tackling corruption: a multi-pronged approach
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The following presentation is for restricted circulation. It is not available in the public domain. Please do not quote from this presentation. Further copying and distribution of this presentation is not permitted.
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.
5 6 49
25
1
14
4147
42
67
34 34
16
32 32
73
94
73
92
7378
85
96
77
n/a n/a0
10
20
30
40
50
60
70
80
90
100
City c
ounci
l
Elect
ricity
Wat
er s
upply
Tele
phon
es
Public
hos
pita
ls
Polic
e
Land
aut
horit
y
Public
bus
es
Tran
spor
t aut
hority
Agencies
% s
atis
fied
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.