Friday, November 19, 2004

Corruption

Going back to the Hoover well. This Hilton Root essay is a fascinating view on the structural corruption that pervades Indian political-economy.

http://www-hoover.stanford.edu/publications/epp/82/a.html

The summary follows:

India, a rare democracy in the third world, is widely perceived to be a political success, despite its economic failures. India's poor choice of economic policies, however, has a political motivation. Getting elected has required targeting tangible spoils to an increasingly well-organized, but fractured, electorate. Political patronage was the stimulus for interventionist economic management, eventually producing massive fiscal deficits. When the danger of defaulting on foreign debt became a reality in 1991, the country's leadership began to reevaluate the flawed economic policies without considering the flawed system of governance that accompanied and sustained the policy matrix. Patronage politics spawned corruption; money, muscle, or influence propelled public services and government, making the system of public administration as incompatible with liberalism as the system of economic regulation. Political and administrative imperatives impelled the country to economic policies that failed. Economic reform will not be complete until the underlying administrative imperatives are transformed by accountable governance.

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