Neil Vaishnavi (of Wash U fame) sent me this interesting article from CNN on corruption in India. The main thrust is that a third of individuals below the poverty line pay bribes in order "to file a police report, to enroll a child in school, to admit a family member into a hospital or to get electricity turned on." All of these are public services that are theoretically provided free of charge. Regarding hospitals more specifically, a 2005 report from Transparency International India suggests that corruption, on a per visit basis, is most rampant here, in comparison to other institutions such as schools.
There are two questions that arise when thinking about corruption. First, is it efficient? Does corruption sufficiently grease the wheels and create an effective price in markets with artificial price ceilings? Or do the negatives of corruption outweigh these positive effects. See here for a great discussion, peppered with some experimental evidence from India.
Another question: who bears the larger burden of corruption - the rich or the poor? There a two ways to look at this. The first is in the strict income sense: does the fraction of one's income allocated to bribes vary for the rich vis-a-vis the poor? Or is the marginal bribe dollar or rupee more valuable to one socioeconomic group or the other? The latter question gets at the second issue: do rich willingly pay bribes out of convenience, whereas the poor are coerced? As mentioned in an earlier post, Paul Lagunes, Brian Fried (both of the Yale Political Science department) and I tried to get at this with an audit study of traffic officers in Latin America. We fix the interactions so as to rule out the convenience story and found that traffic officers more frequently targeted lower class drivers for bribes than their upper class counterparts. The expected bribe payment appeared to be the same across both groups, which leads us to believe that corruption, at least in this context, might be regressive.
4 comments:
what does 'corruption is regressive' mean?
Good question/point. I wrote this up in a hurry. Instead of "corruption is regressive" that should read "bribery is regressive." What I am trying to say is that coerced bribe payments form a higher percentage of the income of the poor than of the rich. Sorry for the confusion.
thank you, atheen. I don't understand the economics term "regressive;" I understand that corruption = bribery in this case.
Yeah but in the study the poli sci students did this year with comparing Right to Information Act vs. Bribe vs. standard application control group they did not find a heterogeneous treatment effect by income or by class. The regressive thing might be heavily dependent on context.
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