The facts are pretty simple to state. A piece of land was sold by party A to party B for Rs 22 lakhs. The official price was Rs 7 lakhs, less than a third of the actual amount that changed hands. That means A received Rs 15 lakhs which he cannot account for. And it also means that B paid Rs 15 lakhs from sources which are also unaccounted for. Then parties A and B arrived at the land registration office to record the new title. The registration fee is 10 percent of the sale price, or Rs 70,000. Party B paid that. But that was not all. Also paid to the clerk in charge of recording the transaction a 20 percent bribe, or Rs 14,000. Only a part of that bribe goes to the clerk. The rest goes up the chain of command all the way up to the chief minister of the state. This is common knowledge.
I got to know the facts of this particular case from party B, a person I know quite well and trust not to misrepresent the facts.
I asked B what would have happened if he had refused to pay the bribe to the clerk at the registration office. His reply, delivered in the most matter of fact manner, was that the registration would not have happened. The transaction would not have been officially recorded and recognized.
What struck me most was the banality of the whole process. The Webster’s New Millennium Dictionary of English defines the adjective “banal” as “pertaining to compulsory feudal service” and “commonplace; tired or petty.” What an astonishingly apt word to describe the state of affairs in India in general.
The government makes the rules. It is the feudal lord. The citizens are serfs. They are compelled to bow and scrape in front of the representatives of the government. As representatives of the government, both the bureaucratic office bearers and their overlords–the politicians–know how to extract rents. Every regulatory hurdle that the serfs have to clear, the more opportunity these representatives of the government have of extracting rent. That is why the bureaucracy expands, and that is why political office is so dear.
It is a multi-person, multi-period prisoner’s dilemma game with perfect information. Everyone knows what the payoffs are to every participant. And we are stuck in it. There is no possibility of anyone unilaterally deviating from the move they make — without losing out. So the game continues. The government makes more and more rules, then it puts the bureaucracy in place to enforce them. The people play along, paying the bribes as they go along. Everyone wins in this game–except the economy.
Thank you, Mr Nehru, for without your and your descendant’s socialism, we would have not understood the banality of corruption. Thanks for making criminals of ordinary citizens. Thanks for creating the largest kleptocracy in the world.