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The corruption cure
So far, we’ve documented the kingly sums channeled to Suharto’s buddies, uncovered the hidden tracks of antiques smugglers and dug into the contract padding of unscrupulous road contractors. But there is a dizzying array of corrupt practices in the world and an even greater number of plausibly effective anti-corruption policies beyond those we’ve examined. Is there any way to be more systematic in figuring out which policies will work in practice?
Economic principles, together with common sense, can be our most useful guides. We know that economic incentives matter, so a good starting point is to think about the carrots and sticks that motivate potentially corrupt officials. Can greater government financial transparency, perhaps through Web postings of highway contract announcements and more details on the winning bids, help curtail theft in Indonesian road building? Will lowering or linking tariffs on similar products dampen the incentives for bribe-paying traders? Or how about increasing salaries of government officials to reduce the need for kickbacks?
We economists could wait around for the right kind of experiments to take place on their own. But governments tend to make lots of changes simultaneously: Salaries are doubled, enforcement increased, and governments made transparent all at the same time, making it hard to sort out which improvements are really the result of any specific policy. And even if changes are implemented one by one, it’s a rare government that sets aside a group of employees or road contracts to serve as a bench mark, like the control villages in the Indonesian road study.
Perhaps the answer is that governments should become more experimental, quite literally, in how they deal with their corruption problems. Officials interested in rooting out corruption must think seriously about evaluating what does and does not work in the real world. Just as medical scientists experiment with different ways to treat diseases, policymakers can experiment with different solutions to social problems. Abstract speculation can take us only so far. At some point, economic theories must be tested in the chaos of real economies. And once we’ve understood what works – higher salaries, government transparency, stricter punishments, or all of the above – policy makers can start work to end corruption systematically. They may find that economics armed with some creativity can make corruption a little less common.
By Raymond Fisman & Edward Miguel
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
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The corruption cure
So far, we’ve documented the kingly sums channeled to Suharto’s buddies, uncovered the hidden tracks of antiques smugglers and dug into the contract padding of unscrupulous road contractors. But there is a dizzying array of corrupt practices in the world and an even greater number of plausibly effective anti-corruption policies beyond those we’ve examined. Is there any way to be more systematic in figuring out which policies will work in practice?
Economic principles, together with common sense, can be our most useful guides. We know that economic incentives matter, so a good starting point is to think about the carrots and sticks that motivate potentially corrupt officials. Can greater government financial transparency, perhaps through Web postings of highway contract announcements and more details on the winning bids, help curtail theft in Indonesian road building? Will lowering or linking tariffs on similar products dampen the incentives for bribe-paying traders? Or how about increasing salaries of government officials to reduce the need for kickbacks?
We economists could wait around for the right kind of experiments to take place on their own. But governments tend to make lots of changes simultaneously: Salaries are doubled, enforcement increased, and governments made transparent all at the same time, making it hard to sort out which improvements are really the result of any specific policy. And even if changes are implemented one by one, it’s a rare government that sets aside a group of employees or road contracts to serve as a bench mark, like the control villages in the Indonesian road study.
Perhaps the answer is that governments should become more experimental, quite literally, in how they deal with their corruption problems. Officials interested in rooting out corruption must think seriously about evaluating what does and does not work in the real world. Just as medical scientists experiment with different ways to treat diseases, policymakers can experiment with different solutions to social problems. Abstract speculation can take us only so far. At some point, economic theories must be tested in the chaos of real economies. And once we’ve understood what works – higher salaries, government transparency, stricter punishments, or all of the above – policy makers can start work to end corruption systematically. They may find that economics armed with some creativity can make corruption a little less common.
By Raymond Fisman & Edward Miguel
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
