Jan Lok Pal is no solution
June 22, 2011   12:00:00 AM

Tackling
corruption requires economic reforms and a popular re-engagement with
electoral politics. We should shun the politics of hunger strikes.

The
idea of a ‘Jan Lok Pal’ is flawed and profoundly misunderstands the
causes and solutions of corruption in India. It seeks to create another
chunk of Government, more processes and rules, to solve a problem that,
in part, exists because of too many chunks of Government, too many
processes and rules.

If the ‘Jan Lok Pal’ presides over the same
system that has corrupted civil servants, politicians, anti-corruption
watchdogs, judges, media, civil society groups and ordinary citizens,
why should we expect that the ombudsman will be incorruptible? Because
the person is handpicked by unelected, unaccountable ‘civil society’
members? Those who propose that Nobel Laureates (of Indian origin, not
even of Indian citizenship) and Ramon Magsaysay Award winners should be
among those who pick the Great Ombudsman of India — who is both
policeman and judge — insult the hundreds of millions of ordinary Indian
voters who regularly exercise their right to franchise. For they are
demanding that the Scandinavian grandees in the Nobel Committee and the
Filipino members of the Magsaysay foundation should have an indirect
role in selecting an all-powerful Indian official.

The argument
that people should be involved in drafting legislation is fine, even if
it misses the point that the Government is not a foreign entity but a
representative of the people. It is entirely another thing to demand
that the legislation drafted by an self-appointed, unaccountable and
unrepresentative set of people be passed at the threat of blackmail. If
we must have representatives of the people involved in law-making, we
are better off if they are the elected ones, however flawed, as opposed
to self-appointed ones, whatever prizes the latter might have won.

The
‘Jan Lok Pal’ will become another logjammed, politicised and ultimately
corrupt institution, for the passionate masses who demand new
institutions have a poor record of protecting the existing institutions.
Where were the holders of candles, wearers of Gandhi topis and
hunger-strikers when the offices of the Chief Election Commissioner, the
Central Vigilance Commissioner and even the President of the Republic
were handed out to persons with dubious credentials? If you didn’t come
out to protest the perversion of these institutions, why are you somehow
more likely to turn up to protest when a dubious person is sought to be
made the ‘Jan Lok Pal’?

But this is us. Given this reality, the
solution for corruption and malgovernance should be one that does not
rely on the notoriously apathetic middle classes to come out on the
streets. The solution is to take away the powers of discretion, the
powers of rent-seeking from the Government and restore it back to the
people. This is the idea of economic freedom. Societies with greater
economic freedom have lower corruption. I have long argued that we are
in this mess because we have been denied Reforms 2.0.

How can we
have Reforms 2.0 if “those politicians” are unwilling to implement them?
The answer is simple: By voting. Economic reforms are not on anyone’s
political agenda because those who are most likely to benefit from them
do not vote, and do not vote strategically. At this point, it is usual
to hear loud protests about how voting does not work, most often by
those who do not vote. This flies in the face of empirical evidence —
when hundreds of millions of people turn up to vote. If it were not
working for them, why would they be voting? They might not be demanding
Reforms 2.0, but something else, and are getting what they want. Instead
of ephemeral displays of outrage — what happened to those post-26/11
candle-light vigils?— it is engagement in the electoral process that is
necessary. There are some innovative ideas — like that of voters
associations — that can be attempted.

There are no better words than those of BR Ambedkar on the place of satyagraha
in India after the Constitution came into force on January 26, 1950:
“…we must abandon the bloody methods of revolution. It means that we
must abandon the method of civil disobedience, non-cooperation and satyagraha.
When there was no way left for constitutional methods for achieving
economic and social objectives, there was a great deal of justification
for unconstitutional methods. But where constitutional methods are open,
there can be no justification for these unconstitutional methods. These
methods are nothing but the Grammar of Anarchy and the sooner they are
abandoned, the better for us.” Ambedkar was speaking in the Constituent
Assembly.

In my view civil disobedience in general and hunger
strikes in particular must be used in the most exceptional circumstances
where constitutional methods are unavailable or denied, and only till
the time constitutional methods remain unavailable or denied.

Some
contend that the system isn’t working, or has been so perverted by the
incumbent Government that it is necessary to resort to public agitation.
This is a dubious argument. Constitutional democracy is an enlightened
way to make policy by reconciling — to the extent possible — the diverse
interests, opinions and levels of political empowerments of a diverse
population. Any other way amounts to coercion in one form or the other.

If
we are to allow that hunger strikes and street protests do better than
constitutional methods, then how would you decide issues where there are
sharp differences? If two Gandhians go on hunger strike asking for
polar opposites, do we settle the issue by seeing who gives up first?
What if competing groups escalate the agitation to violence against each
other? Should we condone civil war?

The working of those
constitutional mechanisms can and must be improved. By us. The
anti-defection law must go. India does not have a comprehensive law
governing political parties. It needs one. Police reforms have been
stalled for decades. There is a substantial reform agenda that must be
pursued. By us.

However, the inability to implement these
reforms is no excuse for resorting to civil disobedience or, as it
happens in other countries, calling in a dictatorship of the
proletariat, the military or the priesthood.

The ‘Jan Lok Pal
Bill’ is not a solution to the problem of corruption. It risks making
matters worse. Hunger strikes are not the right means to promote a
policy agenda in a constitutional democracy like ours. The promoters and
supporters of ‘Jan Lok Pal’ and the public agitation to achieve it are
profoundly misguided. Their popularity stems from having struck a vein
of middle class outrage against the UPA Government’s misdeeds. That does
not mean that the solutions they offer are right.

I oppose ‘Jan Lok Pal’ and the politics of hunger-strikes as much as I oppose corruption and misgovernance.

Jan Lok Pal: unconstitutional, unnecessary

The battle against corruption must be fought by strengthening existing instruments

 

The debate on how to eradic
ate corruption, kick-started by Anna
Hazare’s indefinite fast, has now moved into its second phase. This
involves the drafting of a bill that will provide a foolproof mechanism
to bring the corrupt to book. Here is an examination of the structural
flaws inherent in the Jan Lok Pal Bill

The bill, also known as The Anti Corruption, Grievance Redressal and
Whistleblower Protection Act, 2010 (which will be referred to as the Jan
Lok Pal Bill) is about the most overwhelming piece of legislation since
Independence.

 

Why the big fuss, you may ask. Don’t we have any laws against
corruption in India? Well, of course, we do. Taking of illegal
gratification by public servants was made a criminal offence way back in
1860 by the repository of all that’s evil—the Indian Penal Code, in
Sections 161-165A.

 

The Prevention of Corruption Act was first enacted in 1947. In fact,
when the Delhi Special Police Establishment Act, 1946 (the parent
statute of the Central Bureau of Investigation) was enacted, it was
primarily to investigate allegations of corruption against central
government employees.

 

A “new and improved” Prevention of Corruption Act (PoCA) was enacted
in 1987, complete with special courts and tougher punishments, and with
it, the relevant sections of the Indian Penal Code stood repealed.

The new Prevention of Corruption Act is not without controversy, and
the Supreme Court usually has to consider who a “public servant” is
every other month. However, the main issue with the PoCA is that while
it targets employees of nationalised banks, lower level policemen and
similar other members of the government food chain, the higher-ups just
never manage to face the heat, and even if they do, it takes years for
cases to see the light of day.

 

And all we really want is to see the corrupt thieves in jail, or at
least, not in any position of power. Why is it so difficult to just
throw out corrupt unmentionables? For that, we need to go back to the
hallowed Constitution of India. Article 311 is the party pooper, which
requires that a civil servant can only be dismissed by an authority
equal or superior to that which appointed it. That at least is at the
stage of dismissal. Even for prosecution, the PoCA requires previous
sanction, according to Section 19.

 

Section 197 of the Code of Criminal Procedure, follows suit for
offences committed “in the discharge of official duty”. Obviously, the
public perception is that government officials will always refuse to
accord sanction to protect their minions, perhaps rightly so.

 

Keeping this in mind, the government proposed the Lok Pal Bill, 2010,
as a mechanism for inquiry into allegations of corruption against
public functionaries. As a response, several public-spirited citizens
countered with their own draft Jan Lok Pal Bill. The latter is so much
broader in scope compared to the government’s draft that it is not even
fair to compare the two. The activist’s Jan Lokpal Bill, version 2.1
doesn’t just stop at inquiry. It goes the whole hog.

 

It says that the Lok Pal shall consist of one chairperson along with
10 members. These persons should not, at the time of appointment, be
holding any “office of profit” or be a member of parliament or the
legislature of any state. It also bars persons who have even been
charged (not convicted!) under the IPC or PoCA or penalised under the
Central Civil Services Conduct rules.

 

Out of these 10 members, four must have some “legal background”,
bringing in former judges and lawyers. A maximum of two of these members
can come from a civil services background. Looks like a healthy mix. So
far, so good.

 

Then there is this requirement: “The members and Chairperson should
have unimpeachable integrity and should have demonstrated their resolve
to fight corruption in the past.”

 

This is jarring for two reasons: one, it looks like the bill is
leaving a lot of scope for canvassing for these posts, and two, isn’t
impartiality a much more important consideration? The objective of the
Lok Pal ought to be to conduct an honest and fair inquiry. Anyone who
has demonstrated their resolve to fight corruption in the past might end
up being a trigger-happy vigilante in judicial robes (and police
uniform—but we’ll get to that later), especially when empowered in such a
manner.

 

The cream of the crop, including the chairperson of the National
Human Rights Commission (oh, the irony!) are involved in the selection
process. In fact, a previous version (1.9, apparently) proposed former
Magsaysay award winners and Nobel laureates “of Indian origin” to be
members of this selection committee. The good news is that they have
been shoved aside to accommodate “retired army personnel who are five
star generals”. It is unclear if they asked the 92-year-old Marshal of
the Air Force, Arjan Singh, before adding this post to the list,
considering he’s the only living five star general we have.

 

Any person can propose the name of a deserving candidate to be
appointed to the Lok Pal, and after initial sifting by the selection
committee, the person recommending a candidate has to provide material
to support his nomination. Thereafter, the names will be put up on the
Internet to solicit public feedback, and the committee can also use “any
means” to collect more information about the background and past
achievements of the shortlisted candidates. Lok Pal members are
appointed by the President of India.

 

So despite all of this, if a member is found being
less-than-unimpeachable, the Supreme Court of India—yes, the highly
overburdened final court of appeal and protector of the Constitution—in a
bench of five judges, no less (normally known as a “constitutional
bench”), will have to conduct the inquiry.

 

However absurd an allegation, the Act specifically bars the Supreme
Court from dismissing the petition at the threshold stage. The Supreme
Court can order a report of “investigation” by a Special Investigation
Team and can bench the allegedly errant member while such inquiry is
being conducted. If someone makes a false complaint, they can be
punished with fine and imprisonment.

 

There is, however, no appeal for a member who may have been wrongly
dismissed. Neither is there is any discretion left with either the Prime
Minister or the President of India to withhold the person’s removal.
So, the President can refuse to sign bills passed by both houses of
Parliament, refuse to sign orders of impeachment of Supreme Court
judges, commute a sentence of death which could have been upheld by four
different courts (including two benches of the Supreme Court in appeal
and review), but she must remove a member of the Lok Pal on the
recommendation of the Sup
reme Court.

 

Moving on. What does this wonderfully constituted Committee get to do, anyway?

According to the Bill, the Lok Pal shall be responsible for receiving
complaints for offences under the PoCA, or for “misconduct” which
includes “vigilance angle” which in turn includes the very carefully
worded “Gross or willful negligence; recklessness in decision
making; blatant violations of systems and procedures; exercise of
discretion in excess where no ostensible/public interest is evident;
failure to keep the controlling authority/superiors informed in time”.

Presently, complaints for offences under the PoCA go to the
anti-corruption wings of either the CBI or the local police. The police
investigate, and present their findings to a government authority for
sanction. The government authority is supposed to independently apply
their mind and accord sanction if a case has been made out. The case is
then tried before a special court. The procedure for complaints under
the PoCA now is that the Lok Pal will order an inquiry or investigation,
and only when the Lok Pal is satisfied that a case is made out, will it
direct that prosecution be launched. The procedure for obtaining
sanction prior to prosecution is eliminated, once the Lok Pal orders
investigation it is deemed that sanction is accorded.

 

The branch of the CBI that deals with investigation and prosecution
of offences alleged to have been committed under the PoCA, will now be
the “Lok Pal Investigation Wing” and be under the direction and control
of the Lok Pal.

 

To start with, it crosses the line when it comes to the separation of
powers. Each wing of Government—the Legislature, Executive and
Judiciary—keeps checks and balances on the other, and so they must
remain separate, because that’s the only way to ensure that there is no
abuse of power. Here, the Lok Pal, which is a judicial body, for all
practical purposes, will have control of the part of the Executive that
conducts investigations on its behalf. To add to more confusion, the
chairperson, members of Lok Pal and the officers in investigation wing
of Lok Pal are to be deemed to be “police officers” as defined under the
Code of Criminal Procedure, for the purpose of carrying out
investigation.

 

When a complaint comes before the Lok Pal Committee, they can either
initiate investigation straight away, or conduct a preliminary inquiry.
Interestingly, the Lok Pal can also direct any other person to
make this preliminary inquiry as it deems fit for ascertaining whether
there exists a reasonable ground for conducting the investigation.

 

An aside here—the whole wording of this bill can get kind of
confusing, because, for example, in criminal law, “Inquiry” is usually
meant for a stage prior to the filing of an FIR, and Investigation
denotes that an FIR has been filed. In this Bill, the Lok Pal can, after
investigation, order that Prosecution be launched, which means an FIR,
after which investigation has to be carried out. Again.

 

While the complainant is mandated to be kept in the loop regarding
the inquiry into his complaint at all times, the same is not true for
the public servant. In fact, it isn’t very clear when the public servant
is allowed to make his representation, which is slightly disturbing
considering the possibilities at the end of this inquiry/investigation,
which we’ll get to in a bit.

 

Calling for the say of the public servant at the stage of inquiry is
entirely at the discretion of the Lok Pal. At the stage of
investigation, thankfully, the Lok Pal “shall afford to such public
servant and the complainant an opportunity to offer comments and be
heard”. What is the scope of offering comments, though? Does the public
servant have the right to legal counsel? It is also very disturbing that
there is no provision which prevents the bench of the Lok Pal that
conducts the preliminary inquiry from being the one that conducts the
investigation, which is a necessary safeguard from a “judge, jury,
executioner” situation.

 

After completion of due investigation, the Lok Pal has several
options, including (besides dismissing the complaint) initiating
prosecution against public servants as well as abetting private parties,
imposing of penalities under the conduct rules, order cancellation or
modification of a licence or lease or permission or contract or
agreement, or even blacklisting the concerned firm or company or
contractor or any other entity involved in that act of corruption.

 

Pretty harsh punishments, probably what these people who are guilty
of corruption-related offences deserve—but wait—this is all prior to
having been found guilty by a court of law. Since the
inquiry/investigation/what-have-you is in the nature of a civil Inquiry,
the standard of proof is very different than of a prosecution under
criminal law. Take the example of people who are found guilty in
departmental inquiries who often get acquitted by courts in PoCA
offences. In criminal law, the standard of proof is beyond reasonable
doubt. If this standard of proof is not adhered to, and at this stage
which is prior to any independent investigation authority even looking
into the matter (the Lok Pal Investigation Wing not really fitting in
with the concept of “independent”) the ability to blacklist corporations
is absolutely absurd. Another point to ponder—if the Lok Pal decides to
“initiate prosecution”, who is the investigating authority then? Is it
the Lok Pal Investigation Wing again? God forbid!

 

That’s not all—even at the stage of inquiry (that is before even
concluding their inquiry and referring this case for initiation of
prosecution) the Lok Pal can move for interim measures to restrain him
or his orders from causing further harm. However, even at the stage of
investigation, the Lok Pal can ask for a tabulation and freezing of
immovable and movable assets of the public servant. It is not even
necessary to show that these assets are disproportionate or reasonably
suspected to have been derived from funds which are the subject of
inquiry.

 

The Lok Pal Bill moves further into uncharted territory with the
possible prosecution of the “bribe giver”. For years, the position of
law as to whether a person could be prosecuted for giving a bribe was
unclear. Under PoCA, a statement made by a person in any proceeding
against a public servant that he offered or agreed to offer any illegal
gratification would not make him liable to face prosecution as an
abettor. The purpose behind this was simple—to encourage reporting of
offences and ensure convictions. It looks like a person who had to give a
bribe may not get this cushion of protection before the Lok Pal.

 

More absurdity—the act also takes the liberty of amending the
Prevention of Corruption Act. Sections 7 – 15 of the Act which have
minimum punishments of six months to a year and maximum punishments of
5-7 years are now amended to two years minimum imprisonment and a
maximum punishment of life imprisonment. If the accused is an officer of
the rank of joint secretary or above or a minister, a member or
chairperson of the Lok Pal, the min
imum imprisonment is ten years. A
fine of five times the “loss caused to the public” will be recovered in
case the beneficiary is a “business entity”, and if the assets of the
company be not enough to recover the amount, it will have to be
recovered from the personal assets of the directors.

 

Theoretically, this is fine if you have an independent judiciary,
again, the hallmark of a democracy. Already, there are special courts
constituted to handle matters under the PoCA (the Bombay Sessions Court
has four such Courts). The appointment and superintendence of these
judges, who are at the level of district judges, should be by the
governor of the state in consultation with the High Court exercising
jurisdiction in relation to such state, since that’s what the
Constitution of India says.

 

The Lok Pal Bill pays no heed to such niceties, and instead the
Government (they probably meant “Governor”) has to take advice from the
Lok Pal on the selection procedure of these judges, which one hopes is
not that these judges have shown a zeal for rooting out corruption in
the past.

 

Never mind, at least there is a provision for appeal. Or is there?
Along with the ignorance of the Doctrine of Separation of Powers, the
other big problem with the Lok Pal Bill and which demonises it
completely is the utter disregard for the right to appeal. It is not
clear, whether a bench of the Lok Pal is to be considered on par with a
magistrate (since it conducts inquiry), a court of sessions, a High
Court (though it is to be treated so for the purpose of the Contempt of
Courts Act), a tribunal or a quasi-judicial body (like the Human Rights
Commission).

 

Regardless of what it fancies itself to be, by the lack of provision
for appeal, it is unconstitutional. Granted, the Lok Pal itself doesn’t
convict anyone, but that doesn’t mean that there should be no right to
appeal. The right to at least one appeal against an order, which affects
someone adversely, is inherent in the Constitution. There is no
specific clause regarding appeals in the Jan Lok Pal Bill, and that is
unconstitutional, to say the least.

 

The only mention of an Appeal is in Section 28A regarding disposal of
“Properties deemed to have been obtained through corrupt means” where
appeals against the orders of the Lok Pal shall lie in High Court of
appropriate jurisdiction, which shall decide the matter within two
months of filing of the appeal.”

 

Gautam Patel, a lawyer, points out, that according to Section 27 (2),
there appears to be a further ousting of the power of the judiciary by
barring any proceedings or decision of the Lok Pal from being
challenged, reviewed, quashed or called in question in any court of
ordinary civil jurisdiction. While in my opinion that doesn’t preclude
the interference of the High Court in its extraordinary writ
jurisdiction, thus allowing for judicial review, the section is
extremely high handed.

 

The bill is also contradictory and confusing when it comes to
inquiries and investigations against various public officials. The big
ticket is of course the judiciary. Special provisions exist only as
regards judges of a High Court or Supreme Court. All complaints
concerning these persons will be subject to a preliminary screening for
prima facie evidence—interestingly, judges will only be considered for
offences under the PoCA and not for “other” offences and misconduct.

 

Registration of a case will only be done with the approval of a full
bench of the Lok Pal, a majority of the members being from a legal
background. Even after registration, such cases shall be investigated by
a special team headed by an officer not below the rank of a
superintendent of police. This is all well and good, because this makes
absolutely no difference to the Judge who is protected by the rigorous
impeachment method.

 

The proposed Jan Lok Pal Bill is a knee-jerk reaction to the present
scenario. No doubt, corruption is draining our exchequer as well as our
sense of morality and faith in the system. Like most knee-jerk
reactions, it is not well thought out, and by taking over the
independence of courts and the investigating authorities, leaving no
scheme of appeal, and the ambiguous treatment of the right to be heard,
the bill is absolutely unconstitutional and should not be implemented at
any cost—fast-unto-death or not. The possible implications of its
enactment far outweigh the obviously good intentions that it was drafted
with.

 

It is always easy to criticise and walk away without any suggestions.
So let me throw in my ideas. Say you remove the unconstitutional and
absurd bits from the Jan Lok Pal Bill, what do you have? A legislation
that prides itself on transparency in its constitution and functioning
and easy accessibility by the public, all of which can and should be
strengthened in existing mechanisms. The provisions regarding protection
to whistleblowers should extend to all endangered witnesses in general,
and should find place in a separate legislation or appropriate
amendment to the Criminal Procedure Code.

 

The purpose of the Lok Pal Bill should be a transparent means of
pre-trial evaluation of material against public servants, and providing a
more public alternative to the closed door sanctioning process under
the PoCA and the Code of Criminal Procedure. Like it or not, the process
of sanction is a necessary evil especially when dealing with publicly
elected officials. It cannot be the tool of a witch-hunt, and it must
respect the boundaries of due process and constitutionality.

 

When you already have courts and police personnel devoted exclusively
to unearthing offences under the PoCA, an act which actually places the
burden of proof on the accused, why not expend resources in trying to
strengthen these?

 

By bringing in the spirit of the Jan Lok Pal Bill and improving
citizen access to complaint mechanisms, ensuring witness protection,
along with a transparent and public process of according sanction for
prosecution, there will be a great improvement in the effectiveness of
the PoCA, which itself would be a huge deterrent.

 

A relook at the PoCA and its scope, particularly the inclusion of the
private sector, would also not be out of place. Enacting the Jan Lok
Pal Bill in its present form, the appointment of the officials and the
sure-shot constitutional challenges it will face will be a waste of
time, energies and effort. Let’s get to work with what we have.

 

Why an ombudsman won’t help India

Henry Louis Mencken—the 19th century American essayist and
satirist—once said “For every problem there is a solution which is
simple, clean and wrong”. The proposed Lokpal (Ombudsman) Bill, in both
the government and non-government versions, is one such solution to the
problem of corruption. India is high on corruption because it is low on
business freedom. This relationship holds true across the world,
including the Nordic nations from whom the concept of Ombudsman has been
borrowed. The solution lies in changing the nature, and not necessarily
the size, of the Indian state.

The Heritage Foundation and Wall Street Journal’s annual Index of
Economic Freedom ranks countries based on ten benchmarks, including
business freedom, trade freedom and property rights. Business freedom is
“a quantitative measure of the ability to start, operate, and close a
business that represents the overall burden of regulation as well as the
efficiency of government in the regulatory process”. There is a strong
correlation between business freedom and Transparency International’s
corruption perceptions index—a measure of the “degree to which public
sector corruption is perceived to exist”. Seven of the world’s ten least
corrupt countries rank amongst top ten in business freedom: New
Zealand, Singapore, Denmark, Canada, Sweden, Finland and Iceland. The
ten most corrupt countries have an average business freedom rank of 154,
while the ten least corrupt have an average rank of 12. India has a
business freedom rank of 167, below Burkina Faso, Mozambique,
Bangladesh, Pakistan, Sierra Leone and Egypt. The correlation
coefficient—a measure of the strength of linear relationship between two
variables—between business freedom and perceived corruption for the
year 2010 is a high 0.68.

The story gets even more fascinating. The relationship between size
of government and corruption is weaker than and opposite to that of the
relation between business freedom and corruption. If we rank countries
starting with the nation with the lowest ratio of government spending to
GDP, the ten most corrupt countries have an average government size
rank of 52, the ten least corrupt have a rank of 129. The correlation
coefficient between size of government spending and corruption is a
negative 0.32. We have a bit of a paradox here. When government
intervention takes the form of lowering the freedom to start and run
businesses we have more corruption, but when government intervention
takes the form of taxation and redistribution we don’t see an increase
in corruption. Why so?

The public choice school of economics tells us that politicians and
bureaucrats are self-interested agents who are likely to exploit profit
making opportunities. Low business freedom corresponds to extensive
government intervention in the form of licenses, permits and quotas
(LPQ). Profit-maximising politicians use LPQ levers to extract rents
from businesses. Entrepreneurs too are profit-maximising agents, but
they operate under the perennial gale of market forces. These forces
play the tune to which entrepreneurs dance to satisfy consumers. It is
for this reason that Adam Smith held that “it is not from the
benevolence of the butcher, the brewer or the baker, that we expect our
dinner, but from their regard to their own self interest.” Thus while
market forces channel the self-interest of private entrepreneurs to
promote social good, making the pie grow larger, the undisciplined
self-interest of politicians extracts a piece of the sweet pie while
hindering its growth. High government taxation and redistribution does
not necessarily create LPQ levers for extraction of rent, and this is
why we do not see a positive relation between size of government and
corruption internationally.

Empirical evidence and economics theory tell us that an ombudsman is
unlikely to solve the problem of corruption in India. In the Nordic
countries all the ombudsman does is fine-tune a well-functioning system.
According to the Swedish Parliamentary Ombudsmen Report a total of
6,112 complaint cases were concluded during the period 1 July 2007 to 30
June 2008, of these only one ended with “prosecution and disciplinary
proceeding.” Imagine the number of people such an institution would have
to prosecute in India. A good analogy is that of the anti-trust
commissions in the United States and the European Union who look into
acts of abuse of market power by monopoly firms to promote healthy
competition. The institution is meant to work in a largely free-market
economy. In the same way that a competition commission fine tunes a
market economy an ombudsman too may fine tune a mostly uncorrupt system
but it cannot create one. An ombudsman cannot fix a broken system like
India.

Jakon Svensson writes in a 2005 Journal of Economic Literature
article: “Strikingly, many [of the most corrupt countries] are governed,
or have recently been governed, by socialist governments.” Technically,
India too is socialist. But socialism comes in various flavours; the
command and control philosophy and welfare state philosophy mean very
different things as far corruption goes. Well-designed welfare schemes
in which government plays the role of a financier rather than producer
can go a long way in cutting down on corruption. India needs innovation
in governance; and for lessons on governance, bureaucrats in New Delhi
need not trouble themselves with a flight to Oslo—Patna will do. The
Nitish Kumar government handed out money to parents to buy bicycles for
girl children, rather than use government employees or contractors to
produce and distribute them. This cut out a whole group of parasites.

Publius Cornelius Tacitus (AD 56-117), a senator and historian of the
Roman Empire, in the Annals says “The more corrupt the republic, the
more numerous the laws.” There is no genetic or cultural reason to
presume Indians are less ethical than Norwegians. The difference lies in
legal rules that govern economic activity, and that is what needs to
change.