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Monday, April 25, 2011

Thank You, but No, Thank You, Mr Kaushik Basu.


Kaushik Basu is so much in awe of his “novel” and “radical” idea to stop corrupt behaviour of public servants, that one does not have the heart to administer even a small dose of pragmatic reality.  Intellectuals tend to be simple-minded folks locating their premises and theses in a world which readily agrees to be quantified and categorised, where human beings behave according to the rules of game theory etc.  But ordinary people know that much of human behaviour is resistant to such predictive models


Kaushik Basu’s idea is very simple.  Allow the bribe-taker to accept his bribe.  After the criminal act has been accomplished and the objective of the bribe-giver has been achieved, the state, which will henceforth be in a perpetual state of conspiracy with every bribe-giver of the land (only “harassment bribe” givers) will immediately don the role of the avenger and not only prosecute the bribe-taker on the bribe-givers testimony, but will also recover the bribe paid and restore it to the bribe-giver.  An all-encompassing gigantic trap shall be in place for the public servants of all shades and in all situations all the year round.  Kaushik Basu’s idea does indeed revolutionise the delivery of public service and henceforth the burden of harassment shall be carried by the hapless public servant instead of the honest citizen, as it would be evident presently.  “Revolution”, says Bernard Shaw, “does not end tyranny; it merely shifts the burden to other shoulders.

From illustrations given in his paper it appears that when a citizen is compelled to give bribe to the public servant who is withholding to deliver something which by rights should be delivered unto him, this qualifies to be called a “harassment bribe”.  A relationship of trust and mutuality comes in to play out of sheer necessity, because the law as it exists now makes both the parties to the transaction equally culpable.  The proposed legislation, says Basu, will break this relation of trust and set up a relation of sheer opportunism - an “orthogonal” one - where the bribe-giver will be at the taker’s throat after his objective has been achieved.  The all important distinction between harassment and non-harassment bribe has been only touched upon and, as of now, constitutes bribe given for securing development contracts etc

The other very important fact which has not been specified is this – does the bribe-giver get to retain the fruits of his bribe-giving, or is that nullified, once a claim is made about the fruits of bribery?Considering Basu is so enamoured of the idea, by implication, it would seem that the the bribe-giver gets to retain it, or else why should he collaborate so enthusiastically.  We also presume that suitable amendments shall be made in respect of the offences of criminal conspiracy and abetment so that the act of “harassment bribe” and “bribe-taking” fall into two distinct discursive worlds of responsible civic behaviour and criminal conduct respectively.  Some tweaking of the provisions of chapter on “general exception” in the Indian Penal Code will also be in order and the current legal provision of punishing malicious complaints and laws relating to the seizure, forfeiture and confiscation of property will have to be suitably updated 

Now let us imagine some scenarios in a real world situation where the anti-corruption law as proposed by Basu has come into force

Scenario I
A, a casual labour, complains that he paid a bribe of `100 to the public servant to release his wages amounting to `1000.  This complaint makes the authorised public servant liable to be imprisoned for bribe-taking, and the bribe-giver entitled for being restored the `100 which he paid as bribe after confiscating it from the public servant.  The enquiry reveals that A had been employed in some activity in the town but decided to take advantage of the fact that his name appears in the muster roll of his panchayat etc.  He paid a bribe of `100 to get `1000 for no work at all

Generally, a significant percentage of illegal gratification especially in activities like MNREGA belongs to this category

It is the state which is very often at the receiving end of such commerce because nowhere is there such a thing as a free lunch.  Incentivised by this law A may like to get back the initial investment made by way of bribe as well.  It also opens the way for overcompensation, using it as a weapon of black mail

Scenario II
A, an aspirant for some appointment, lodges a complaint that he has been forced to pay a harassment bribe of `100,000 to the concerned authority to issue his appointment letter which he had unauthorisedly held up.  On enquiry it turns out that A was actually nowhere in the list and he paid a bribe to get his name fraudulently included.  Taking advantage of this law now he wants his “seed money” back

In a variation on this theme, immediately on appointment, he uses it as a weapon of blackmail to escape some disciplinary proceeding, enquiry, punishment etc.  In another weirder scenario a group of cadets decide to have fun with the concerned authority and collectively allege that they had paid harassment bribe to get in.  The bribe-giver, we must remember is free from any liability and the police are duty bound to institute a cognizable case

Scenario III
A, the CEO of a telecom company, decides to buy his way through spectrum bidding.  He makes an irresistible offer of bribe to the competent authority thus making himself guilty of an offence under Sec.  13 (1) d of the Prevention of Corruption Act, 1988 as it exists today.  In the new regime, he files a complaint pleading harassment bribe, making a fool proof case for why he was compelled to do so.  The chartered accountants, investment bankers etc.  can always make a case that such crippling financial commitments had been made in the firm belief that he will win the bid in a transparent bidding.  But sensing that the decision may unfairly go against him, he had been compelled to pay a heavy bribe.  By merely registering the complaint he secures exoneration from any future enquiry under criminal misconduct.  He gets to retain his illegally secured contract.  At the same time, he has made a strong claim for the recovery of initial investment that he made in the form of bribe to the concerned public servant.  In the hands of a competent lawyer the most impregnable wall of distinction between harassment bribe and non harassment bribe will collapse like a house of cards

Even if he does not win the contract, he could use the complaint of harassment bribe to indemnify him for the lost opportunity and to punish the public servant for not having obliged him, because nowhere does Basu suggest that unhonoured commitments in a bribery deal shall not be treated as harassment bribe.  This is the paradigm and any commercial deal can be fitted neatly into it

Those of us who have any experience of dealing with corruption and vigilance complaints can vouch that the greatest drain on any such organisation is by way of the unconscionably large number of bogus, mischievous and motivated complaints which have to be dealt with nevertheless.  In many organisations, it is now mandatory for the complainant to file an affidavit and also give an undertaking that he would produce material evidence to prove his charges once the enquiry is afoot.  But in practice, in the majority of cases, all that the complainant is interested in is the initiation of the enquiry which discomfits the public servant.  Such a measure will effectively bring to a halt not only commercial decision making, but decision-making of any kind where an accusation of bribery can be credibly raised.  Those in the know will tell you that after the investigation into animal husbandry scam, public spending in Bihar plummeted because any one who had so much as put pen to paper in concerned files raised presumptions of bribe-taking in the mind of investigator.  Post-scam, except for the barest housekeeping expenses, nothing much was spent and a large number of civil servants evaded taking any financial decision.  How much more difficult the situation would be in the new regime where public servants can be exposed to the charge of bribe-taking involving compulsory investigation and at no cost to the accuser

Mr Kaushik Basu is doing a good job in his area of expertise.  There is still a lot of scope for more good work and his being distracted to fields of drafting new laws will be a great loss to the common weal

10 comments:

Pegasus said...

Sir,
You make very valid arguments and indeed I find Mr. Kaushik way out of his skin as a financial advisor, suggesting such absurd ideas. You rightly put Bernard's Shaw's pithy quote...Perhaps, Mr Kaushik Basu must stick only to his core competence...you have very vehemently argued and succinctly put across your views which are very logical and convincing indeed!

Manoje Nath said...

thanks very much .but mr kaushik basu is a learned man.

maniac.hunter said...

agreed!giving powers to the payee and not holding him accountable isnt goin to solve the problem.the real problem is the judiciary which takes years to give a decision and still their is an scope for revision

Dr Mayank said...

i was shocked that an intelectual of basu's stature can write such
kitsch; he seems feckless while discriminating between bribe givers
and takers. if people sitting at the helm of affairs can come up with such romantic remedies to cure corruption then god save the country. the simple examples that you have cited against basu,s theory are so apt and grounded in reality that it can only come from a person who has a long experience of handling cases of corruption. you have very succintly and rightly debunked and rubbished mr. basu's fantacies of ending corruption. your article begins with a polemical tinge but ends
as a synthesis not an antithesis and emerges finally with the promiseof providing new dimensions to the understanding of this arcane algebra of corruption in our society

Manoje Nath said...

thanks mainac.hunter and thanks dr mayank.kaushik basu has thrown up an idea and his considerable stature will force people to cosnider it.but howsoever impractical the idea so long as the focus remains on corruption and the urgent need to do something about it , it is all to the good.

Er. AMOD KUMAR said...

Respected Sir,
Something very special Interesting post you have written
regarding “Corruption” so I will write a brief comment as soon as possible…..With Kind Regards

ajoyipsbhr85 said...

when the MORAL standards of the Bribe-giver and Bribe taker are similar, no Mechanism will ever work...!
if the Country had admired the Bribe-rejecters, u would have been recognized for ur Uprightness rather than ur Literature of the Funnier variety... Ur pain would have been read by the laughing minds...
the Indian Standard Moral allows "Self Bribe-Accepting" and while Rejecting "Others Bribe demanding"...! the Holier than Thou attitude has made us a Laughing stock in the comity of nations...!
Mr. Kaushik is lucky that his Hypothesis is not Applicable on him...!
recently a person challenged the State Vigilance to collect the CDRs of the Trap Team and that of the Conspirators, the Complainant and the So-called Neutral Witnesses...! the Vigilance Investigation Bureau blinked first and could not accept the challenge..
who are we talking about...?

Neers said...

Sir, i just read a profile on mr.basu in IE's EYE the sunday supplement and realised that what he probably missed was putting his ideas in a correct format, thus said, notwithstanding the fact that nothing in my two cents, makes me an expert to even attempt a comment. he did seem to be a learned man, from the profile!

also, i do seem to be nodding at the points raised by you.

conflicts? my opinion... conflicting presentation or conflictiting ways of reaching the same goal!

corruption has now become a skin of the junta itself.

Anonymous said...

going through this article , i was beset by the same doubts that the earlier commetnator neers had - how can some one as distinguished as kaushik basu be so wrong . he is one of the leading economists of our time and if he makes a proposal it cannot be taken so lightly. yet i am not bale to figure out what is that manoje nath is missing . i will revert to it.

Anonymous said...

I believe Mr. Nath should have first familiarized himself with the rudiments of game theory before taking on someone as eminent as Mr. Kaushik Basu.To study social or economic problems they are reduced to some simplifying assumptions (e.g. rational choice) so as to render them amenable to mathematical analysis. It is an accepted academic procedure. It is a common place of our experience that it is the poor who bear the brunt of corrupt practices the most. They have to bribe government officials at every stage be it BPL cards,Indira Awas Yojana or old age pension.Mr Basu’s proposal would greatly empower them vis a vis the corrupt public servant.
For the benefit of Mr. Nath I will quote the kernel of the proposal of Mr. Basu.
“It should be clarified that bribery is still being considered illegal, and the total punishment meted out for bribery may still be the same. That is under the old system the bribe giver and the bribe taker are fined Rs x each, what I am suggesting is that we fine the bribe taker 2x and the bribe giver Rs 0. In other words, what is being argued that this entire punishment should be heaped on the bribe taker and the bribe giver should not be penalized at all? We may in fact go further and say that in the event of a case of bribery being established in the court of law, the bribe taker is required to give the bribe, to the extent that its size can be uncovered, back to the giver”.
I find this a very workable proposal, but perhaps, since it is a little abstract it could not make its point