Law and Economics with emphasis on corruption in India – Dr Kaushik Basu

Dr Kaushik Basu is a former Chief Economic Advisor (CEA) to the Indian Government, he was
also the chief economist of the World Bank from 2012-2016. In 2011 he suggested legalizing of
a class of bribe to reduce the corruption in India. The law that is meant to prevent corruption in
India is, “The Prevention of Corruption Act, 1988, this Act lays in detail the punishment for
corruption and the procedures related to it.

He did not recommend bribery to be legalized altogether but a class of bribery to be legalized, he
recommended that harassment bribes should be legalized. Harassment bribes are those bribes
which one pays even when he has all the requirements for the job which is supposed to be done
by a particular government official. His view was that a person who has all the prerequisites and
still have to pay the bribe was treated unfairly when he was caught paying a bribe. To end the
such misery towards the bribe giver he recommended to legalise harassment bribes.

According to me if such a bribe is legalized then it will persuade the citizens to give bribes more
often especially in a country like India where government offices are filled with crowd and red
tapism. Though the idea behind such legalization is good but it should be implemented keeping
in mind the habits of the citizens in India.

Following the recommendation of Dr Basu the government made many changes for the
protection of the bribe giver, like now a bribe giver has 7 days to report a particular situation
where he was asked for bribe and where he gave because of the involvement of undue-influence.
Dr Basu in his essay and his video told how the bribes effect the economy of a country for
example, licensing in india involves lot of bribery the companies which can afford such a bribe
gets a license easily whereas startups face difficulty to get a particular license, which lead to
inefficiency in the economic system.

A small recommendation by Dr Basu related to economics and law lead to a revolution, why I
said a revolution is because an archaic law was changed because of a research lead by a scholar
which involved both law and economics, I think such research on law and economics is
important and effective for our country to move forward.

Submitted By- Harshit Manwani

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