Should Corruption be Legalized?
Police officers have greased hands, lawyers are corrupt, and bureaucrats are wont to gratuity.
There are websites dedicated to spinning yarns of bureaucratic delays with an extra dose of Quaid e- Azam laced bills. (See here and here.)
On December 5th, an owner of a textile mill posted his story. The owner bribed a government representative for failing to have paid income taxes for the past couple of years. He writes: “I paid bribe to a representative of revenue department. And I paid a cheap amount as income tax.”
But that shouldn’t come as a surprise. Tax evasion is second only to cricket as our national pass-time: only 260,000 Pakistanis have paid income taxes for three consecutive years.
Bribery is clearly widespread, and that the Pakistani government has a lack of arrows in its quiver to tackle this issue should be concerning.
In a column entitled “Ending Corruption in Pakistan,” Dr. Azeem Ibrahim analyzed the widespread effects of corruption in Pakistan, and concluded that the “country has reached the highest level of corruption yet. He offered several policy prescriptions, but the apparent truth of the matter is that the very essence of argument is hinged on the same solutions that any person worth his name in Pakistani politics has called for. But few have acted on the claim, which is why I doubt Imran Khan will be any different.
Dr. Kashik Basu, the Senior Vice President and Chief Economist of the World Bank, and former Chief Economic Adviser to the Indian Government derived a novel solution to the problem of small-scale corruption using Game Theory. He is in favor of making bribery – the very foundation of corruption – partially legal.
He argues that bribe givers should be given immunity for what he calls small scale – though rampant and endemic – “harassment bribes.”
The reasoning goes like this. Under the present circumstances, both the interests of the bribe giver and bribe taker are the same: to hide the fact that both parties were complicit in an illegal activity. When bribe giving is made legal, however, the bribe giver has an incentive to report the bribe taker. This is so because any person that gives a bribe would rather prefer the task to have been completed without having to pay an additional cost. Now that the bribe giver can report with immunity, it creates a whistle blower protection system that Dr. Azeem Ibrahim wrote so eloquently of.
The task completed, bribe taker caught, and the bribe returned. It’s a win-win-win for the bribe giver, and by-and-large, the Pakistani society.
So how exactly are high rates of corruption reduced?
Given that the bribe taker knows that there is a prospect for getting caught, the bribe taker would be less likely to accept bribes. Because it’s not in the interest of the bribe taker to continue accepting all sorts of illicit exchanges, he will act will more restraint and caution, thereby drastically reducing the rates of harassment bribery.
The obvious question that remains unanswered is how exactly does one go about proving that an incident of bribery has taken place? For this, our endeared cricketers who took bribes to bowl deliberate no-balls offer one possible answer. News of the World reporters who helped undercover the spot-fixing scandal copied the numbers on the bills they handed over to Mazhar Majeed. When the police asked reporters for evidence, they provided them with the numbers on the bills that were in the possession of Majeed.
Now, surely making the act legal in cases other than harassment bribery, such as doling out huge contracts in exchange for a hefty sum, wouldn’t apply under this measure. That would have to be dealt with through various policy and legal means, to which answers are yet to be found.
Pakistani politicians seem to be on a campaign against corruption, and there would be no better means of denting corrupt practices than implementing this reform, at least on small-scale level.