A Game called Graft

Corruption (specifically, graft¹) in public offices has a really bad name - erodes public trust, offsets growth, destabilizes institutions. It’s also just happens to be a matter of fact that corruption cannot be eliminated. It has been present in many forms in various institutions though human history. Every state has grappled with it, and eventually accomodated it. I wonder if corruption as that extremely bad thing that should be the first thing to be dealt with to the exclusion of everything else in South Asian democracies is primarily a modern concern.

The Communist Party of China has had corrupt members² since its inception. It didn’t hinder China’s progress through the 20th century, pulling millions of people into the middle class and becoming the world’s second largest economy. The overall literacy in China was 20% in the 1950s compared to 95% today. One would be hard pressed to find anything else in the history of civilization like what the Chinese did in one generation.

In India, in the state of Tamil Nadu, the two parties which have held power in the state for the last half-century are infamous for being incredibly venal - prone to not just graft, but to rent-seeking as well. That didn’t stop them from winning elections and coming back to power again and again³. In the 50 years that the two main parties in the state has held power, Tamil Nadu (TN) has become the most urban state in the country, having the highest per-capita GDP. Female teen illiteracy has fallen to less than 3% (compared to another state, Gujarat, at 16.3%, which is worse than TN today than it was at the time of independence, when it was actually ahead of TN), and its correlate,  total fertility rate (TFR) is 1.7. China’s TFR today is 1.67 after a generation of one-child policy. TN’s achievement is the same as China’s on a smaller scale, but unaccompanied by the loss of life as seen in communist China in the 1950s⁴. That’s 50 million people who can read and write and whose kids can read and write, in one generation.

Despite the picture that’s generally painted, corruption in public politics is not uncommon outside of Asia and Africa, even in the first world countries. Consider the United States. In Path to Power, Robert Caro shows how the future president Lyndon B. Johnson cultivated the political machinery of Texas to get power, bestowing favours on the Dallas oil men and Houston’s Brown & Root. Brown & Root became extremely rich thanks to the federal contracts Johnson obtained for them. He in turn was patronized by them, and had funds funneled to the Democratic party and himself through them, using the money to manipulate members of Congress in order to further both his career and his backers' cause. Corrupt? No doubt. He also bought electricity and modern amenities to the bypassed Hill Country of Texas as a congressman, and as a President was pivotal in the passage of the Civil Rights Bill, the Equal Voting Rights bill, and the Civil Rights Act. Would one have been possible without the other? Likely. At what timescale?

The point I am trying to make is growth happens despite public corruption. Using public corruption as political talking point when it is so commonplace is to make it a distraction - the questions should be about policy decisions and what the overall direction of progress should look like. If one attributes the failures of certain democracies to graft, can one also attribute successes⁵ of some large democracies to turning a blind eye to graft? To not be corrupt when everyone else is, is to not be effective, and to be playing a losing game. If you are a player in this game, should you be battling entrenched graft or making decisions that will provide housing to multi-generation landless poor even if it means paying off someone? What's the cost of trying to change the rules of the game instead? It is true that if you have operated in a system where you never had to deal with graft, it imposes an undue mental burden on you to navigate another system where it’s accepted. Case in point, moving to India after living in the United States or Singapore for a while. It also seems to me like it is one of those things humans learn to adjust quite rapidly to, like eating spicier food or jaywalking⁶ in heavy traffic. We do not mind paying the cost as long as it doesn't hinder our overall sense of autonomy.

FOOTNOTES

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