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The Fundamental Development-Related Issue

The World Bank (WB) has mentioned in its latest report that corruption is a fundamental development-related problem. Corruption not only hinders the development of a nation, but also disproportionately affects the poor and vulnerable. This social evil decreases income, apart from making services, such as health, education and justice, expensive.

Corruption exists in both Developed and Developing nations. Many believe that the type of corruption that exists in rich countries has, in most cases, less direct impact on common people than in poorer countries. As per the Corruption Perceptions Index 2022 of Transparency International, countries, like Somalia, Burundi and Yemen, have the highest corruption rates, especially in the Public Sector. They also have the lowest per capita income. On the other hand, rich countries, like Denmark, Finland, New Zealand, Norway and Singapore, have the lowest corruption rates in the Public Sector.

Various research works have established the fact that one of the major reasons for the prevalence of corruption in poorer countries is steep financial inequality. Furthermore, these States have lack of resources to provide essential services to their people. Hence, there is a wide gap between demand and supply of those services. However, there is lesser room for such corruption in rich countries.

In most of the corrupt nations, a vicious circle works between corruption and social norms. If corruption becomes widespread, then it turns into a social norm or practice. Two studies can be mentioned in this context. In the late 1990s, Raymond Fisman and Edward Miguel, the two Researchers of Department of Economics at Harvard University, chose the UN Office in Manhattan, New York to examine whether corruption and social norms were related to each other. As far as the parking space at the UN Office was concerned, it was not enough to park the cars of all the working diplomats of different countries. Hence, one could have parked her/his vehicle illegally somewhere nearby, or could have parked the car legally at a parking zone somewhere far away.

Fisman and Miguel collected detailed information about the number of illegal parking-related incidents at the UN Office from November 1997 to November 2005. After receiving the names of diplomats, their nationality, the place where the parking violations occurred, etc.; the two researchers noticed that the rate at which the diplomat of a country broke the law was related to the corruption rate of her/his country. It is to be noted that those diplomats were not penalised for breaking the law according to the international diplomatic norms. Hence, those, who parked their cars in accordance with the law, did not do so out of fear of penalty, but because of their habit of respecting the law.

As per the research, the annual per capita violation rate of diplomats from countries with relatively low levels of corruption as defined by the WB, such as Norway, Sweden and the Netherlands, was around 10. Meanwhile, this rate was about 30 for diplomats from corrupt nations, and much more for diplomats from some countries, including Chad (126), Sudan (121) and Albania (86).

The well-ordered social norms or customs of a country, may be established through the strict laws of that country and their proper enforcement, deter people from corrupt practices, even if there is no fear of punishment. Before deciding whether or not to associate oneself with corruption, one tries to understand what others are thinking about this practice.

In his 2006 research paper ‘Teacher Truancy in India: The Role of Culture, Norms and Economic Incentives‘, Indian Economist Dr Kaushik Basu explained this issue in detail. Dr Basu discussed the impact of social policies and norms on the tendency of teachers to take leaves in various provinces of India. In 2004, the highest rate of teacher absenteeism in India was recorded in Jharkhand (41.9%) and the lowest in Maharashtra (14.6%). As the salary and perquisites of teachers, and penalties for dereliction of duty were equivalent in these two provinces at that period of time, differences in the behaviour of teachers could not be explained on that basis. According to the former Chief Economist of the WB, the main reason for the difference in teacher absenteeism rates in the two provinces was different social attitudes towards this issue in Jharkhand and Maharashtra. Where there is less social sanction for this sort of irresponsibility, such evasion is socially costly there.

Keeping in mind the vicious cycle of poverty, corruption and social norms, there is a need to create social awareness and resistance against corruption in Developing nations. Else, it would be too late.

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