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Why Are Anti-corruption Reforms Difficult To Implement?

Policy Matters is a global initiative focused on economic recovery from COVID-19 and centering on the economy, people, and vulnerable communities.

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Shekhar Chandra is a Ph.D. candidate in Public Policy and Environmental Philosophy at the Massachusetts Institute of Technology (MIT). His research investigates the existence and persistence of systematic corruption in government bureaucracies and why anti-corruption reforms are challenging to implement. He examines how corruption undermines the social and economic institutional arrangements that are prerequisites to any analysis of distributive justice.  

What are your thoughts on Corruption and India?  
Prime Minister, Rajiv Gandhi, in an election rally, lamented that for every 100 cents spent by his government on the welfare of the poor, only 15 cents reached the intended beneficiaries. The rest was lost in corruption and wastage as the money flowed through massive federal and state bureaucracies. Over the years, the statement has metamorphosed into a folklore of bureaucratic inefficiencies and public sector misgovernance more generally. Gandhi’s statement received particular attention as it was coming from a sitting prime minister. There are plenty of such examples, as corruption remains high in most of the developing world. Using household- and firm-level data, the World Bank assessed the primary annual global cost of bribery to be $1 trillion. Even if we account for uncertainties in the estimate, the scale of it is still worrisome. The massive amount of corruption is a major problem worldwide. As noted by Francis Fukuyama, corruption is the defining challenge of the twenty-first century, similar to the way ideological battles between democracy, fascism, and communism became the defining challenges of the twentieth century. Transparency International places India at 85th place of 180 countries surveyed globally. India has a range of laws against corruption but has had only limited success.  


While corruption remains a problem for most of the developing world, an important question emerges: why doesn’t corruption go away? Why does corruption persist in government bureaucracies?  

Let us see what the research tells us and what we can learn about the sticky nature of corruption. At the core of all anti-corruption policies are two main assumptions. The first is about the relationships among various branches of the government. These relationships are often assumed to be like a principal-agent problem, which in simple terms means that politicians are often benevolent and have the best interests of the public in mind. Such characterization puts a disproportionate burden of corruption on bureaucrats. The real-world experience belies this. Politicians are often in cahoots with the bureaucrats. The second assumption deems government a single entity, which means one person at the top making policies and the other, the bureaucrat, implements those policies. However, even small governments have labyrinthine bureaucracies representing myriad actors whose interests are not often aligned. So, a single entity government assumption doesn't make any sense. 

In such situations, how do we understand or tackle corruption?  

A key question is whether guardians (politicians) can guard the lower bureaucrats, or do we need to guard the guardians themselves? In a democratic setup where politicians and bureaucrats are supposed to create necessary checks and balances on each other, failing to do so often results in a nexus between them to indulge in corruption and the misuse of institutions. Robert Wade of the London School of Economics, in his papers published in the 1980s about corruption in South India’s irrigation bureaucracies, showed how the linkages of corruption are formed between various levels in the government. So, it's not like one public official indulging in corruption as a bad apple. What he essentially showed was that politicians come and go, bureaucrats come and go, the corrupt linkages remain functional. This institutionalization of corruption that we see in most developing countries thrives on the nexus between bureaucrats and politicians through well-defined hierarchical networks. Thus, it's not a principal-agent problem but a social network of corruption that is formed in government bureaucracies. It's these social networks that make corruption systemic in India. The quintessential principal-agent architecture of our anti-corruption efforts can neither correctly describe how corruption happens nor suggest policy prescription that can effectively control corruption. 

For more information on the series kindly contact our executive editor at large for public policy, Neeta Misra [email protected] who is based in Washington DC.   

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