Saturday, April 23, 2011

Symptomatic of a common disease in the economics

Professor Jean Drèze whistle with professor Basu’s new working paper (PDF) released in the Finance Ministry. Both of them seems to be missing a very relevant fact that any attempt to address the corruption is required strengthening of institutional mechanisms like police, enforcement system etc. Beside, there should be strong security system established to protect the persons who report after bribing. Otherwise, given the present conditions, we do not know what will happen to the bribe givers and reporter!!
I wonder what would he meant when he uses the words like “common sense”, “morality” etc since he and his alike minded persons are largely away from the meaning of that words!! 

Here are Prof.Jean's argument on morality and commonsense.
  • Basu’s argument is all the more puzzling as the paper ends with a plea for acknowledging the role of values and ethics in eradicating corruption: “if we want to really get at corruption, what we need to build up are values of honesty and integrity in society”. Well said. But how is the legalisation of bribe-giving supposed to help in building up such values?
  • In fact, once moral considerations are introduced, the initial argument breaks down once again. Is the legalisation of bribe-giving supposed to make it less immoral? If so, that would tend to encourage, not discourage, bribing. If not, why would anyone blow the whistle after paying a bribe? That would be like drawing attention to one’s own immorality. Possibly to deal with this, Basu suggests that bribes might be “reimbursed” to bribe-givers if they blow the whistle. That would indeed give them an incentive to blow the whistle — but this suggestion takes us further and further away from anything like the real world.
  • It may be argued that paying a harassment bribe is not morally reprehensible in the first place, because the bribe-giver is a victim and the bribe is an act of self-defence. I am not persuaded. When you pay a harassment bribe, you abdicate your duty to use other means to resist the harassment, not only for yourself but also on behalf of others who might face the same situation. You also secure an advantage for yourself, vis-à-vis others who may not be able or willing to bribe. This does not sound particularly ethical.
  • If you find all this heavy-going, just think about it from a common-sense point of view: does it make sense to fight corruption by making it easier for people to blow the whistle on their own acts of bribe-giving, so that bribe-takers are deterred from asking for a bribe in the first place? Ethical issues aside, this is quite a fanciful idea, even if it is certainly possible to think of situations where it might work.

1 comment:

  1. Kaushik Basu is becoming very suspect as an economist.

    I've made a similar point at:

    Also see: