So a few should sacrifice so that others can get rich! It is naive to expect this from others. If public officers do their jobs (less corruption, more security and better infrastructure) why can’t we make sure that they get rich in the process? Is it so hard to find a way to reward them for their efforts?

The problem with Adam Smith has always been that that philosophy does not incorporate societal utility, just personal utility. Keynes et al recognized this long ago, and about 50 years ago the concept of externality came about to try to incorporate societal interests into the equations of economics.

As I am huge fan of macro Economics, I would love to see someone do a study of the ECONOMIC impact of bribery. The “moral” aspect is a subjective one, IMO.

This gentlement named Vinod (no not that one) is a Harvard PHD in economics, and he’s now an economics professor. He has dedicated his work to this very issue.

http://www.fordham.edu/economics/vinod/

I wonder if he could chime in on the issue? Let me email him.

To continue, why is this by itself a problem? As Varma points out this is a result of over-regulation by government. Could it be that, left to itself without govt. intervention the cost of schooling would rise to the ‘right’ market price which is the current price and the bribes. So, by having artificially low costs imposed by government you have people going around the ‘system’ and setting the costs back to where they might belong. You must be aware that schooling costs in India are incredibly low for the quality of eduction provided. Looks like the market is pricing this appropriately. Two cases seems very close to me (sans scholarships) a) Govt sets low prices for education. People go around the system, pay bribes and well-off kids get into the best schools. b) The market sets high prices for good schools say “harvard, penn” and well-off kids go to ivy league while poor students go to community school. Does this really lowers the productive capability of the nation. Arguably the most happening place in the 19th century in the US was the New York area. Does anyone remember Tammany Hall, George Plunkitt and all the ‘bosses’, not shining beacons of public service. New York seemed however doing fine, going from third world to a first world status during that time.

In fact, corruption is a problem at the ‘top’ level. CEO’s cooking their books, paying themselves company money or loans, not expensing stock options, human rights violations, monopoly and collusion, govt granting tax breaks to companies – these tend to have a higher cost because they distort the market pricing mechanisms and thereby cause a breakdown in the feedback structure. This is something that would play into all the ‘public service ethic’ etc. which needs to be closely monitored.

1. The stats are misleading. India has far less uniform density than the Netherlands or Japan. You’ll probably find higher social capital in India’s rural areas than in urban ones.

2. Overpopulation and competition for resources strongly shape culture.

you’d be challenged to find anyone who’d seriously claim that India has a higher soc capital than the US across a wide range of variables…

You need to compare areas with like densities: say, the large cities of India with the large cities of the U.S. In high density environments, you tend to trust more people in your family or immediately around you (because there are more such people, and you need each other’s help to succeed where there’s high competition for resources and a dysfunctional economy), but fewer people beyond that level (because of competition).

… by others, however, it’s dismal (anonymous folks from one village trusting anonymous folks from the next…

Granted. Villages were the basis of identity, and intra-village (clan) competition was common, as in Scotland. At a larger scale, if India is like Europe, then you have the French and the Brits’ level of distrust between its ethnicities. In comparison, the U.S. was originally settled by people who were relatively racially homogeneous and more or less came over around the same time.

For example: The corruption of Iraq war… Bechtel being given infrastructure projects as if Iraq dont have any contractors who can build buildings and sewer systems. As if Iraq didnt have any of that before the Americans went it. But Bechtel gets contract to re-build so all “Iraq re-construction” money comes back to US.

The Bribe moneys that are being collected by various people ($4 Billion) must be put to use by them, in terms of buying items and building houses and such… which ends up adding to the GDP and creating jobs ???

Sigh. The exception doesn’t make the rule. My point wasn’t that corruption is non-existent in the US –> it most certainly is. The point is that it’s far more pervasive at the lowest levels in India than it is in many western nations and THAT makes all the difference. The cop who gives you a parking ticket in NYC is far less likely to be on the take than the one who gives you one in Delhi.

When it’s that pervasive all sorts of weird things just sorta break down… hence my example about the Indian postman.

But what causes that low sense of community is overpopulation leading to competition for limited resources.

This is a multivariate problem and pop / resources feed the equation, BUT, no matter how you slice it, you can’t explain it without incorporating culture…. for ex., if you want to test the Overpopulation hypothesis, from the CIA world fact book -

India

Pop = 1,080,264,388 Land = 3,287,590 sq km Thus, density = ~328 people / sqkm

Let’s compare that to some famously high social capital countries…

Japan

Pop = 127,417,244 Land = 377835 sq km Thus density = 337 / sqkm

Netherlands

Pop = 16,407,491 Land = 33883 sqkm Thus density = 484 / sqkm

Both the Netherlands & Japan have higher density, almost no real natural resources, but still much higher soc capital.

Let’s take a famously low soc capital / density example -

Nigeria (resource / oil rich, but still dirt poor)

Pop = 128,771,988 Land = 910,768 sq km density = 141 people / sqkm

[People x land x resources] explains some aspects but there’s an “x factor” in the equation which (at least in these cases, appears dominate the functiona altogether)…

Vinod? Reread “Bowling Alone” or any of Putnam’s other works. India should have much higher social capital than the US on many of Putnam’s measures.

I’m quite familiar w/ Putnam’s work – I cited him earlier. Soc capital is NOT an exact science – by some measures India should be stronger than the US (for ex., villagers knowing each other), by others, however, it’s dismal (anonymous folks from one village trusting anonymous folks from the next enough to conduct diff types of biz & have disputes arbitrated effectively by govt institutions). Overall, you’d be challenged to find anyone who’d seriously claim that India has a higher soc capital than the US across a wide range of variables…

I do concur with Putnam, however that it’s declining in the US. I also argued earlier that it’s increasing in India… but the gap is wide and will take a long time to bridge…

Whether it is private or public owned what matters is accountability thru checks and balances. The government in the US is not simply the federal government but begins with my city council – where even if I cannot vote I have a voice. Having an elected executive in the US gives citizens the ultimate power over the government letting them have a government that exists to serve them.

The concept unfortunately in India is very different. The socialist mindset of Indian politicians of every stripe – not just the commies – makes them think that the government exists to serve the people by making its decisions for them. Which is why smaller panchayats in India often have more powers over their livers than large city corporations. Added to that the “intellectuals” of India while screaming about “monopoly capital” and “the evil forces of international capital” are silent when it comes to corrupt cops and babus for reasons best known to them. I am waiting to see Tehelka film an expose of small time bribe takers at the motor vehicles department. I am waiting with bated breath!

To the extent that corruption is an adaptation to poverty, bureaucratic entanglement and the need for survival, I’d rather not demonize the parties involved. It is a whole lot easier, however, to demonize CEOs, Congressmen, MPs, and other well off purveyors of corruption. There is absolute nothing mitigating about their circumstances.

The Christian nature comment was from my observation of American society. As an observor, I noticed that the community feeling is far more prevelant here in the US amongst Americans. During any national emergency there is a flood of donations.

Yeah I dont know if America has that much of a community sensibility. Most of the time, neighbors don’t even talk to each other, other than to say hello when they get their mail. Whereas in India, all your neighbors know what you’re doing, and as the cliche goes, the whole village raises a child. America is a lot more isolationist, quite the opposite of community feeling.

I heartily agree with Varma – an interventionalist government, its intentions cloaked by social cause de jure creates its own license for corruption.

So you agree then that the US’s attack on Iraq was corrupt?

For all its objections, freedom & growth maximization have the advantage of being relatively objective vs. the far more abstract goals of “equity”,

Let me get this straight, “freedom” is objective, but “equity” is not? Where does that leave Truth, Justice, Beauty and the rest of the Aristotelian forms?

Also an extremely expensive ticket at that. Only people who can raise a lot of money has a chance to get elected to a public office. Once you get elected you are almost always likely to get re-elected. (sometimes with the help of re-distrcting).