The real cost of not paying bribes

Episodical discourses on corruption/bribe focus on the big examples with their entertaining value. Small-time bribes are rarely a matter of intellectual/media pursuit. However, small-time corruption is what affects the large multitude of people in their daily walk of life.

People seem fatigued about reporting retail bribes on anti-corruption advocacy/reporting portals like ipaidabribe.com, if the diminishing reporting numbers are any indication. In effect, we do not have a fair idea on the magnitude of corruption and its temporal trajectory, other than some broad sweeps by self-styled transparency organisations.

While big-ticket corruption is for rent seeking and for making un-entitled or abnormal gains at huge public cost, small-time, counter corruption is often for ensuring one’s entitlements and/or for routine general services. Incidence of corruption is not only in public services. Some private provisions involving licensing, essentiality, shortages and asymmetry of power also suffer from that fate.

Why should somebody pay a bribe for an entitlement or even for ensuring a paid-for good or service?

The answer lies in the value of the entitlement, product or service in terms of its opportunity cost and the power asymmetry involved. The opportunity cost is often several multiples of the amount of bribe involved and, at times, with lives and livelihood at stake. Take the following few anecdotes from the early life of this author.

Early 1980s

As a graduate aspiring for a job, I went to a test centre for writing the Assistant Grade Examination conducted by the State Public Service Commission. I saw my former teacher, now an MLA, in the premises. I respectfully greeted him. After acknowledging my greeting, he asked, ‘why are you here, for the test?’

My affirmative reply was met with a surprising response: “what is the point in constructing a dam after the water is gone?” With a pat on my shoulder he pacified me stating “these things should be told in advance as the final list is ready”. I neither knew how that was possible, nor the amount of bribe involved, nor how and to whom such bribes should be paid. Having no inclination to bribe, I never tried to know. But I understood the cost of not paying that unknown amount of bribe: the job itself, with its life-long income security.

The State Electricity Board decided to electrify part of the village where my family home was located. Three dozen families were to get the connection. The electrical line was not electrified for about six months after the work was completed.

The Assistant Engineer would occasionally come for ‘inspection’ of the line and the internal electrical fixers. He would say he was yet to get his tea and snacks. At first I did not understand and would offer him tea. He would brush it away. After about six months, one day he and his team came for charging the line. Angry, he shouted: ‘of the three dozen families you are the only one who did not give us even tea.’

It turned out that other families had given bribes in the range of ₹500-2,000. The cost of my not giving a bribe was the six months’ delay in getting electricity for 36 families.

Early 1990s

Computerisation of public services was expected to do wonders on efficiency, certainty and in reducing counter corruption. Booking long distance rail tickets for summer vacations was a nightmare. There were no flexi fares and no-frills flights. Train was the only option for ordinary people. Rail ticket booking got computerised.

In Delhi, before the summer vacation people would start queuing up even before 4 am, though booking counters would open only at 8 am. Despite being first before a counter I was told waiting list number 300 plus only is available. Ditto next day too. Third day I narrated my experience to a person next in the queue. He asked, did you pay the speed money? He also explained the modus operandi (because how to pay bribe was also a mystery for me). ‘Fold a ₹100 note and the ticket booking form together, hiding the currency note inside, and push it into the counter. The booking person would glance at in appreciation and his/her fingers would assume great speed in making entry on the computer; without the currency note their fingers would be paralysed!’

Though now educated on bribing I declined to pay that bribe; saw paralysed fingers and wait-listed tickets, again! The cost of not paying that ₹100 was more than ₹30,000; cost of two flight tickets. My wife and I had to travel to South because of an emergency. ₹30,000 was my total annual salary and a loan from my GPF was taken to finance it. Computerisation did not make much difference unless fed with speed money!

These few real-life anecdotes vividly show that cost of not paying a bribe, howsoever small an amount, can be enormous for the affected person. Though situations and modus operandi might have changed over time with new technology and systems such stories continue. It could be for a ration card, which ensures life time food security to a family at much lower cost. It could be for a passport or a job which will ensure lifelong long security. The opportunity cost of not paying the bribe is so overwhelming for ordinary people that it is unthinkable for them not to pay it.

Given the power asymmetry between the bribe giver and taker, punishing givers of such bribes [with fine and/or up to a year imprisonment as per Section 171E of IPC], for ensuring their basic entitlements, must go. That step may rather help in combating corruption, by exposing the bribe takers. Simultaneously, with enhanced, swift punishment to both givers and takers of big-ticket, rent-seeking bribes and corruption.

The writer is Director, National Institute of Securities Markets. Views are personal.

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