Dr Debayan Pakrashi

WHAT IS CORRUPTION?

 Introduction

 Definitions

 Forms and typologies

 Causes and consequences

 Challenges in fighting corruption

WHY WORRY
ABOUT CORRUPTION?
Cost of Corruption:
€ Decreases GDP by 1%/yr (UN)
€ Bribery alone = $1 trillion/yr
(World Bank)
€ 3-5% world GDP
(World Bank and IMF)

Corruption:
 wastes development resources
 major impediment to development (MDGs)
 in the ‘Age of Austerity’ less tolerated by donors and their publics?
 LEGAL APPROACHES
TO DEFINING
CORRUPTION

 In very basic terms, if it is illegal, it is

corruption; if it is legal, it is not

 International conventions provide harmonised definitions of corruption-related

offences facilitating judicial cooperation between partner countries

 National legal definitions for corruption-related offences vary, due to different legal
traditions and social norms
SOCIO-ECONOMIC APPROACHES TO
DEFINING CORRUPTION
 Defines corruption as the result of individual rational decisions: e.g.
 ‘The abuse of public office for
private gains’ (World Bank)
 ‘The misuse of entrusted
power for private gain’ (TI)
 Has been famously expressed as the
formula C = M+D-A (Klitgaard 1988)
 Addresses the motivation for
corrupt acts (e.g. private gain) and the
nature of power (formal/informal
or public/private)
1.The claim that monopoly increases corruption, so therefore more
competition (via decentralization or privatization) will reduce
corruption;

2. The claim that discretion causes corruption, so therefore tight

controls based on formal criteria, which leave little room for
individual officials to make discretionary judgment calls, will reduce
corruption; and

3. The claim that accountability reduces corruption, so therefore

more accountability (more oversight, or more democratic checks,
or what have you) will reduce corruption.
FORMS OF CORRUPTION

(UNODC)
CAUSES OF CORRUPTION
 Low levels of economic development and high levels of poverty
 Unintended consequences of economic liberalisation
 Unintended consequences of Foreign Direct Investment
 Weak institutions
 Lack of accountability and
transparency
 Inequality
 Democracy (or a lack of
democracy!)
 Offshore banking, tax havens
and money laundering
 International organised crime
* Source: http://cpi.transparency.org/cpi2011/results/
 Bribery
 payment made in money or kind and can be initiated either by the public
servant or the beneficiary. It can be extortionary, collusive or anticipatory

 Favoritism & Nepotism

 a mechanism of power abuse implying privatization and highly biased
distribution of state resources, no matter how these resources have been
accumulated in the first place.

 Embezzlement
 theft of government property and resources by people who are entrusted upon
to take care of it.
 Lack of awareness
 Lack of proper Service-Level Agreements
 Lax supervision and monitoring of staff
performance
 Discretion
 Absence of appropriate grievance redressal
mechanisms
 Obsolete policies
 Lack of awareness
• can be removed by clearly specifying the guidelines and information about the
services.
 Lack of proper SLAs
• can be taken care by a time bound service can be easily tracked by the citizens if
the information is freely available hence empowering them to seek penalty when
the SLA is missed.
 Lack of accountability, supervision
• can be improved through institutional diagnostics such as periodic or social
auditing which can be facilitated by well documented information at disposal.
 Discretion
• can also be kept under check if these subjective decisions are well documented
and hence available for review.
 Grievance mechanisms and obsolete policies need to be directly addressed
 Indian job guarantee scheme, enacted by legislation on August 25, 2005.
 NREGA is an Indian job guarantee scheme, enacted as law in 2005.
 Designed as a safety net to reduce migration by rural poor households in the lean
period.
 A hundred days of guaranteed unskilled manual labour provided when demanded at minimum
wage
 works focused on water conservation, land development & drought proofing

 Finances
 Statutory minimum wage of Rs 120 (US$2.39) per day at2009 prices.
 The Central government outlay for scheme is 40,000 crore (US$7.98 billion) in FY 2010–11

 Mired in complaints of corruption

References
• http://nrega.nic.in
•http://en.wikipedia.org/wiki/Mahatma_Gandhi_National_Rural_Employment_Guarantee_Act 13
 Application for job card Selection of works
Prone to Verification Approval of shelf of
corruption
Issue of job card projects

Informing village head

Demand for employment
Prone to Acknowledgement of Preparation of estimates
corruption demand And approvals

Work allocation

Maintenance of muster roll

Payment of wages

Prone to
corruption Adapted from deck: [PPT] 
14
NREGA Implementation [Presentation to NAC]
nrega.nic.in/presentations/implement_NREGA.ppt