Slow and unfair

In Nagaland the absence of administrative reforms has resulted in high level of corruption due to poor governance. Today we are witnessing economic growth, corruption, and governance moving in opposite directions. It is a fact that when governance was good, growth was high and corruption was low; now that growth is low and corruption is high, governance has sunk to an all-time low. We don’t know whether a further decline in governance will eventually result in lower growth and higher corruption. Should that happen we would have the worst of both worlds! According to World Bank, corruption has a direct impact on the size of the informal economy. It increases the cost of creating new businesses and staying in business within the formal economy – unofficial payments and unpredictability of their size and frequency drive the costs and risks so high that the entrepreneurs prefer to move their businesses underground to avoid bribes that they have to pay for services such as registration, licensing, permits and so on. Corruption in social services makes them less affordable and leads to creation of alternative services in the informal sector. Weaknesses in governance – governance being defined as the way in which public institutions perform their functions in a country – are strongly correlated with deficiencies in growth. Bad governance is associated with corruption, distortion of government budgets, inequitable growth, social exclusion, and lack of trust in authorities. Inefficiency of formal governance institutions leads to creation of informal institutions that substitute for the functions that the formal ones are unable to perform. Indeed there is a real correlation between governance, growth and corruption. These three institutions can be reformed to promote good governance: the state, the private sector and the civil society at large. However, amongst various cultures, the need and demand for reform can vary depending on the priorities of that society. In India what is good governance for one class can be very bad for another. The case of job reservation is a conspicuous example to illustrate this dogma. Successive governments have forgotten the key operating principle of good governance, which requires two simple things: speed and fairness. Our institutions of governance have become so inward looking that they have not only lost sight of the citizens but also the objectives. This is the central problem of governance systems in our part of the world. They put process before outcome. This makes reform of any sort impossible because procedures have become an end to the means. Unfortunately, when it comes to strengthening institutions or mechanisms that can bring in an element of accountability and minimize corruption, no government appears to have the will or the capacity to do so. Successive governments have allowed the pot of corruption to boil without even making a serious effort to keep it in check. And they have a vested interest to maintain the status quo. This suits both the politicians and bureaucrats who are interested in covering up for their individual and collective deeds of omission and commission. For their survival, they will never allow healthy institutions, which can keep their misdeeds under check, to flourish. Institutions and mechanisms set up to maintain accountability and minimize corruption continue to be dead horses, which the men in power flog every time only for their own petty politicking. And even when the overall governance is adequate, there are often areas of specific policy neglect that can have monumental effect on the citizens’ well-being. Economic development stalls when governments do not uphold the rule of law, pursue sound economic policy, make appropriate public investments, manage public administration, protect basic human rights, and support civil society organizations including those representing poor people in decision making. Clearly the two most essential ingredients of good governance – speed and fairness – have thus become victims of mere rituals. In such a situation short cuts involving bribes lead to corruption with a few exceptions. The exception is also a part of the procedure. In fact there is plenty that is frightening in our scenario – the unending series of scams; the utter lack of accountability, transparency and probity in every field of activity; and the explosive mix of corruption and callousness crushing the aam aadmi.