IS CORRUPTION MOSTLY CLIENT DRIVEN?

Our ancients were no strangers to the all-pervasive phenomenon of corruption. The story goes that a king, desperate to contain the corrupt depredations of his subordinate, assigned him the task of counting waves on the seashore, confident that there was no way he could turn this into a lucrative money spinner. Initially frustrated, the wily public servant soon found a way.

He stopped a group of fishermen preparing to launch their boats for the day’s catch and sternly asked them to desist, as the boats would break up the waves, disturbing the count!

A parley ensued between the seasoned men of the world and soon, the boats were on their way and our functionary back on the job of counting, both waves and filthy lucre! Not surprisingly therefore, both Eastern and Western classical tradition deal with the ‘demand’ side of corruption and what can be done to discourage bribe-taking. Bribe givers, the ‘supply’ side, are invariably typecast as largely passive ‘victims’.

Thus while Kautilya’s ‘Arthashastra’ spoke of the king’s agents finding it impossible ‘not to taste the honey that finds the tip of the tongue’ and, like fish drinking in water, eating up at least some part of the king’s revenues, ancient Greek and Roman philosophers theorised about the ethical and political degeneration of entire societies and polities into ever greater chaos, much as the second law of thermodynamics speaks of ever increasing entropy. T

he approaches have one thing in common; mending the malaise must concentrate primarily and almost wholly on ending bribe taking.

Modern day administrative doctrine continued with the premise of corruption primarily being the preserve of the rulers, (the principals), and their agents with Klitgaard’s famous ‘mathematical’ formula stating that Corruption = Monopoly + Discretion – Accountability.

The formulation itself suggests the remedy; reduce and eliminate monopoly power over goods and services through competition, lessen the scope for the practice of agent discretion through systemic changes and enhance accountability through transparent ‘naming and shaming’ followed by punitive measures such as fines and imprisonment.

While details can differ from case to case, most remedial strategies are primarily aimed at the bribe seeker, the ‘demand’ function in the corruption matrix.

he ‘supply’ side, the bribe giver, remains the passive ‘victim’, to be shielded from corruption’s vicissitudes. Contemporary developments in anti-corruption legislation in India followed the same pattern. T

he Second World War brought an exponential rise in government contracting and procurement. This, along with an all-encompassing rationing and licensing regimen, was fertile ground for the mushrooming growth of corrupt practice.

The Criminal Law (Amendment) Ordinance 1944 read with the old sections 161 to 165 of the IPC, (the Indian Penal Code), was felt to be unequal to the task of meeting these challenges and so, India got its first Prevention of Corruption Act, (POCA), in 1947, even before its independence.

While Section 165A, the abetment of offences under Sections 161 to 165 of the IPC, was made cognizable and non-bailable, the bribe giver was not guilty of any distinct primary offence. Essentially his situation remained the same as when the earlier IPC section on abetment, (Section 107), was applicable to him and even the charge of abetment was rarely, if ever, pursued in practice.

The mindset was still to see him as a ‘victim’ and not as a co-conspirator. In the years that followed, while provisions related to presumption of guilt and circumstantial evidence based on possession of assets incompatible with known sources of income were increasingly brought into play against bribe takers, bribe givers were visited with a lesser ‘asymmetric’ liability, both de-jure and de-facto.

The POCA 1988 with its later amendments, which replaced the 1947 Act as well as the Criminal Law Amendment Act 1952 and IPC sections 161-165, broadened the definition of ‘public servant’, enhanced punishments for various corruption related offences, overhauled the provisions related to ‘criminal misconduct’ and included even retired officials within its purview.

However, the bribe givers’ liability remained confined to a charge of abetment. To begin with, this included an amnesty clause where testifying against bribe takers protected them even from prosecution for abetment. There were of course strong practical reasons for this.

Making the bribe giver equally or ‘symmetrically’ liable would, very likely, choke off even the faltering trickle of complaints which kept the anticorruption effort going. In 2011, Kaushik Basu, then India’s CEA, (Chief Economic Adviser), argued that at least for the category of ‘harassment’ bribe cases, an asymmetric liability policy limiting prosecution only to the bribe taker needed to be followed. This would make the ‘victims’ of such bribery demands more likely to report offences.

Correspondingly, corrupt principals and agents, calculating the higher risks involved, could be expected to lower, and eventually cease their demands. As expected, such a suggestion from the CEA received a mixed bag of responses in the media. While some foreign publications like ‘The Economist’ and ‘Le Monde’ thought the idea worth pursuing, ‘

The Hindu’ called the idea ‘obscene’ and opined that in a scarcity economy, this would only push up costs for the bribe givers. Others like Jean Dreze, apart from raising objections related to ethics as well as inefficient and corrupt law enforcement, projected the spectre of corrupt officials retaliating against such complainants.

While it may be argued that such scenarios can exist as easily in a symmetrical liability regime, some simulation studies published by Abbink et al and available at SSRN, (Social Sciences Research Network), do suggest that while lesser ‘asymmetrical’ punishments do push up reporting on bribery, this trend almost vanishes when retaliation enters the picture.

Be as that may, having joined the UNCAC, (United Nations Convention Against Corruption), India realigned its anti-corruption laws considerably with the POCA 2018. Bribe giving by individuals and corporates is now a distinct criminal offence and there is only a seven-day window of immunity to report bribe taking without facing legal consequences.

While it may be too early to assess the results of this legislation, one thing has become very clear. Corruption, for the most part has been recognised as being a client driven service industry, like any other

The ‘victims’ of this malaise are perhaps confined only to instances of ‘harassment’, which alas, as expected, affects only the poor and vulnerable sections of society. For the rest, it seems to be ‘business as usual’!