THERE is an old debate about the relationship between rapid growth and corruption. Do the two go together, and if so what is cause and what is effect? Does corruption facilitate growth, or hinder it? Or does it make no difference to growth? Conversely, does rapid growth bring with it more corruption, or hinder it? Or does it make no difference? Manmohan Singh teased the subject gingerly by saying in mid-November 2012 that economic growth creates new opportunities for corruption, but went no further. One response could be: Don’t we know!

Contemporary evidence suggests that economic growth in India has begun to falter at the same time that corruption charges have mushroomed. Though there have been plenty of other factors causing the slowdown, not least the crisis in the leading western economies, there is a case for arguing that corruption has impacted growth. Look at iron ore, and the controversies that began with the discovery of large-scale illegal mining in Karnataka by the Bellary brothers; that was followed up by the further discovery of rampant illegal mining in Goa. Both were obvious cases of politicians and businessmen morphing into local oligarchs and becoming a law unto themselves, so much so that the Bellary brothers were virtually responsible for a change of government in Karnataka.

Following a typically delayed outcry, courts and governments stepped in, and mining activity was stopped pending a clean-up, with the inevitable denouement. Iron ore production in the country has dropped by about 40 per cent in two years, from about 212 million tonnes to barely 130 million (projected for 2012-13), steel plants have been forced to cut production for want of raw material, and imports of steel have gone up as a consequence. One reason why the industrial production curve has dipped over the past year and more is because mining output has fallen. All this is over and above the wasteland that Bellary has become, devoid as it is of virtually all the old economic activity.

There are many more examples to suggest an inverse relationship. Isn’t the policy paralysis that is said to afflict the UPA government a consequence, at least in part, of all the corruption charges that have been flying around for the last four years? Aren’t the rapidly growing travails of the telecom sector a direct consequence of the multi-stage drama following the spectrum allocation scandal authored by Andimuthu Raja – what with court cases, audit reports, media frenzy and parliamentary committee reports, not to speak of ceaseless lobbying and counter-lobbying? Haven’t the scandals over coal mine allotments, some of them resulting in court cases that go back to the early ‘ultra-mega’ power projects (for 4,000 mw and more, per project), played a role in necessitating a new mining law that is stuck in Parliament? Didn’t Mumbai’s real estate and the related construction business go into a deep freeze following scandals over specific projects (remember Adarsh?), a local sand monopoly and manifestations of the builder-politician nexus?

Hasn’t land become a political hot potato – and caused a project famine – after it became clear that land grab by governments and companies was destroying livelihoods because they paid people a pittance for the land taken forcibly from them? Such land expropriation in different parts of the country has led to recurrent protests, police firing and deaths. Isn’t it said that the bureaucracy (some of whose leading lights have gone to jail, or been raided because of the corruption cases) has stopped taking decisions because these can be scrutinized by any citizen who files an application under the Right to Information law? And, if 57 per cent of the grain that passes through the public distribution system does not reach its intended beneficiaries (as the Planning Commission says), surely no one can argue that such rampant corruption is growth-enhancing?

 

These and other examples support the broad thesis – advocated by, among others, the World Bank – that corruption leads to misallocation of resources, undermines the legitimacy of the government, raises the cost of (and uncertainty surrounding) projects, leads to the creation of arbitrary rules, and facilitates the extraction of surplus ‘rent’ by a powerful few. All of that would suggest that corruption hinders normal business and therefore economic growth. Yet, it’s not an open and shut case, and the debate goes far beyond Indian shores. There is substantial academic literature on the subject, not least because there are plenty of countries to study and from which to draw conclusions. While the broad weight of opinion would seem to suggest that corruption other than speed money does not facilitate growth, there is no shortage of evidence on the basis of which to argue the opposite. Among other things, how has China been able to maintain growth averaging more than 10 per cent annually, for 30 long years, in the midst of rampant corruption? How did Indonesia emerge as an Asian tiger even as it became a byword for corruption and pay-offs? Weren’t South Korea and Taiwan known to be corrupt during their years of rapid ascendancy?

 

One explanation for contradictory findings and arguments could be that there are different kinds of corruption, in weak and strong states. The latter are often called developmental states like Taiwan and South Korea, where the state plays an active role in pushing economic growth, including determining the nature and direction of growth, and the role of private players. There is corruption, but not rampant enough or destructive enough to disrupt growth. Weak states, on the other hand, have a more kleptocratic style of corruption, descending to open thievery that undermines the legitimacy of the system.

China’s case is instructive, if nothing else because comparisons are so often made between it and India. Andrew Wedeman, in Double Paradox: Rapid Growth and Rising Corruption in China, concedes that corruption in China has been anarchic and predatory, unlike what prevailed in the developmental states of East Asia, where businesses financed rightist political parties that in turn gave them pro-growth policies. Explaining the paradox of rapid growth coexisting with large-scale corruption in the Chinese system, Wedeman argues that serious corruption did not crop up in China till the mid-1990s, by which time the economy had already acquired enormous momentum. Second, corruption was mostly tied to new value being created, not feeding off the existing stock of capital; officials merely took a part of new profits. Finally, anti-corruption drives kept the problem in check.

 

Most of these authoritarian-developmental states dealt with only two variables, development and corruption. India throws in a third – democracy, which goes with a free press. How does that change the equation, and the dynamic? Does it act as a check on corruption, or does it make politicians more hard-nosed in their responses, and inured to criticism? Do identity-based political parties naturally veer towards pork-barrel politics, because voters will vote their caste (for instance) and thereby ignore corruption as an issue? One could look to India for answers, or a variety of South American countries, or some African ones; in many of them, either democracy got derailed or the economy did. In some, a kleptocracy simply took over. In quite a few, democracy and a free press continued to survive because a vote did not change anything and the press was ineffective. Indeed, one could say that India has seen a combination of all these outcomes.

What of the example provided by the United States, and its professed belief in laissez-faire? The last third of the 19th century was that country’s period of most rapid growth because of the spread of industrialization, creating by the birth of the 20th century the world’s most powerful economy. Those same transformational decades, roughly from 1865 to about 1895, saw the simultaneous rise to stardom of the ‘robber barons’, businessmen who led the charge when it came to extending economic frontiers westwards and industrializing what until the US Civil War had been a mainly rural economy.

 

Whether it was railroads or steel, banking or oil, men with names like Vanderbilt and Carnegie, Morgan and Astor, Mellon and Rockefeller became synonymous with sudden wealth, so much so that Mark Twain referred to the period in a book that he coauthored, as ‘the gilded age’. Not the golden age, but a period when there was a lot of gilt being put on a harsh reality that included rampant corruption (eg. New York’s Tammany Hall politics, which now finds reflection in how Mumbai is run) and crony capitalism – one commentator on the subject recalled that a railroad tycoon bought up the whole of the Pennsylvania legislature because he wanted clearances for running a railroad through the state.

So should the Indian question with regard to growth and corruption be judged from the prior experience of the strong development states, or China, or the United States? Interestingly, some writers have begun to call the current period India’s own gilded age. Jayant Sinha and Ashutosh Varshney, in an article in the Financial Times in early 2011, listed the similarities: a roughly equivalent level of urbanization (30 per cent and on its way to 50 per cent), the rise of industrial capitalism in a noisy and participatory democracy, the sprouting of millionaires who used comparable methods (grab resources, influence regulations, keep out foreign competition), and the birth of political bosses in cities and party machines. Varshney (a professor at Brown University) has spoken on the subject subsequently, as have others like the Odisha MP, B.J. Panda.

But comparisons are also beguiling, because when you point to the obvious similarities (sudden rags-to-riches stories, corrupt party bosses, crony capitalism, extraction of monopoly profits, cornering of resources, etc), the danger is that you ignore the substantial differences, as Varshney himself has said later. America’s problem was an unbridled capitalism that had no rules and cried out for them, India has too many rules and mostly of the wrong kind. America’s West was opening up, whereas India with a population density that is ten times the global average has a scarcity of land (naturally, the land scandals have been in India, not the US). So while there are elements of today’s Indian reality which can be compared with what went on in the US about a century-and-a-quarter ago, the differences can be equally important, especially when trying to figure out what happens next.

 

The Gilded Age in the US ended because of the boom-bust cycle. The over-construction of railroads led to a collapse of some railroad companies and the failure of many banks, causing widespread havoc. A recession that began in 1893 lasted three or four years. By one reckoning, unemployment increased from three per cent in 1892 to 18.4 per cent in 1894. Inevitably, there was a rash of strikes, and worker violence. A recovery began in 1897, but unemployment fell back down to five per cent only in 1900.

As India knows only too well, crisis can beget reform and that is what happened in the US. Politicians from both the leading parties realized that things had to change, and a variety of new laws came into effect: antitrust legislation to curb the power of the big companies, new banking laws, laws against unfair labour practices, social legislation to give women the right to vote (they were believed to be less corruptible), and of course the introduction of prohibition, which was seen among other things as cutting the power base of corrupt party bosses. A muckraking press, feeding a growing middle class of readers spread nationwide, exposed scandal after scandal, provoking a good bit of the change and giving birth to (for instance) the Food and Drug Administration. The first two decades of the 20th century have thus come to be known in the US as the Progressive Era.

 

The crucial question for India is, will corruption kill the growth story, or will growth continue Chinese-style along with corruption, or will the system manage to reform itself, as the United States and many other countries did? Comparisons with China are tempting but difficult because the political system is non-comparable. Do opinion surveys and statistics, which abstract from political detail, present any answers? Yes, but more than one. Curiously, while there is evidence to suggest that rapid economic growth has increased corruption in many societies, this positive correlation changes dramatically when you look at the relationship between corruption and economic development (not growth). In other words, you get one story in countries that have already arrived, and a different one in ‘emerging’ markets.

And so it is that the countries that have the best scores in the Corruption Perception Index compiled by Transparency International also happen to be the wealthiest ones – those in Scandinavia (Denmark and Finland score 9.4 on an index constructed on a scale of 0 to 10) and other parts of Western Europe, plus outposts like Singapore (9.2) and New Zealand (which tops the charts with 9.5). In Latin America, which has both rich and poor countries, Chile (the richest country on the continent) has the best corruption score (7.2), while Venezuela, Paraguay and Ecuador have the worst. Even among the Brics countries, Brazil (which has a corruption score of 3.8) is richer than China (3.6) which is richer than India (3.1). However Russia, which is closer to Brazil on per capita income, scores only 2.4 and is the outlier, possibly because of its oligarch-driven system, while South Africa, which has gained a reputation for political venality even as its economic performance dips, has seen its corruption score drop over five years to 2011, from 5.1 to 4.1.

 

An interesting hypothesis that Vivek H. Dehejia of Carleton University in Ottawa outlines is that, ‘Excessive corruption and inequality, by corroding the political process, threaten to de-legitimise capitalism and the market system and so create pressures for reform and the redistribution of wealth that then temper the incentive-driven impetus to capitalist growth, which caused the inequality in the first place.’ Dehejia suggests that corruption perhaps follows a trajectory somewhat similar to inequality, which usually increases in an economy at a certain stage of development, then levels off and eventually comes down as incomes rise beyond a threshold (a pattern on a chart that is called the Kuznets curve, after the economist Simon Kuznets who first tracked the process).

The least unequal countries, when you look at income as the yardstick, are the ones with the highest per capita income, in Scandinavia. In contrast, some of the most unequal countries are the middle-income entities that are in the thick of rapid economic development – Brazil and China. Lower down the income scale, India when it was a poor economy (and not today’s lower-middle income entity) had an inequality score that was much less than its present rating. When it comes to corruption, can you then plot a Kuznets-like curve, showing corruption rising and dipping as an economy moves through different stages of development – starting with a poor score in all really poor economies, then improving for a while, only to dip as corruption rises with growth (the ‘gilded age’ phase), and finally levelling off and falling?

 

Looking at Transparency International’s Corruption Perception Index numbers for different countries over the years, it is unlikely to be a clean trend line, and much more like a scatter diagram. Still, the data suggest tentative conclusions because of some clear patterns. The worst corruption scores are mostly for the poorest economies – Somalia, Myanmar, Sudan (all below 2.0). In India’s own case, its corruption score was a miserable 2.7 in 2002, it then improved to 3.5 by 2007, but has dropped off since to 3.1 in 2011. Indonesia in its worst days had a corruption score of 1.9 or less, but has since climbed to 3.0. Bangladesh, emerging as a success story that in many ways outshines India, has seen its score jump from 1.2 in 2003 to 2.7 in 2011.

There is no poor country with a score better than 6.0, and no rich country with a score worse than 3.0 (Italy, for instance, has seen its score dip dramatically but even now is at 3.9). It must be mentioned, though, that the Corruption Perception Index is measured by polling international businessmen, so it has a strong bias towards businessmen’s perspectives. Still, the broad lesson seems to be: get rich and corruption will come down dramatically, even if the process of getting there will increase corruption.

Do these numbers have a social context, in terms of the new forces and processes that get unleashed as development takes place? One is urbanization, which for India is expected to go from about 30 per cent now to 50 per cent in the next three decades, inviting some parallels with the US as it moved through the Gilded Age and into the Progressive Era (a process, let it be noted, which lasted a half-century). Urban voters in India are less likely to vote their identity than their rural counterparts; in Delhi, for instance, state elections in a predominantly urban state feature issues like clean air and reliable power supply, proper public transport and better schools. Performance in government rather than representational identity becomes the issue.

 

A second and related development is the growth of the middle class, which has many estimates depending on the definition used. By most accounts, though, India’s middle class is still quite small; hence a switch from welfare-oriented to aspirational politics is only in a nascent stage. However, between 30 and 40 per cent of parliamentary constituencies now have a significant urban voter segment, and the middle class has already given birth to a more vocal public space, through a noisier media and an active civil society. The political class ignores these trends at its peril, though it should be clear that India is not at the tipping point where a reformist impulse can be said to be strong enough to transform what is now a very corrupt system. In short, the local equivalent of the American Progressive Era is not about to be born.

The context in the two countries is also different in many ways, so comparisons have to cease at some point. India has had legislation on its books since the 1960s to prevent industrial monopolies of the kind that flourished in America’s Gilded Age, as also detailed labour legislation, strict banking laws, a strong central bank and other institutional and legal safeguards that took birth in the US only during the Progressive Era. Instead, what is being born in India now is new life in existing institutions, like the courts, the Election Commission and the Comptroller and Auditor General, while the only significant new legislation in this context is the Right to Information Act. It is worth noting that this law was borne out of civil society pressure, after a sustained campaign for the right to information on government programmes was waged in Rajasthan (most notably) by activists like Aruna Roy, to make public all information related to expenditure on projects; the law has done more than anything else to open up government functioning to scrutiny by citizens.

The courts’ willingness to admit public interest litigation – starting from the time P.N. Bhagwati was the chief justice of the Supreme Court in the 1980s – has also played a crucial role in allowing interested citizens, even if they are not directly affected by an issue, to challenge government decisions in courts. To take one example, public interest litigation has led to court orders that forced the Delhi government to clean up the city’s air by mandating the use of compressed natural gas (rather than diesel or petrol) in all public vehicles.

 

Two other vital developments have been the greater enthusiasm that the Election Commission and the Comptroller and Auditor General have brought to bear on their functioning. Starting with T.N. Seshan as Chief Election Commissioner in the 1990s, the Election Commission has taken its mandate more seriously than before. It has more effectively checked once-widespread practices like booth capture, and now watches election spending with a hawk’s eye. It is not entirely successful, but it is beyond question that candidates and parties have to be more careful in the way they conduct themselves at election time. But the Constitutional body that has hit the headlines most of all in recent years is the Comptroller and Auditor General; whether it is the spectrum scam, the coal mining scandal, or the misuse of public money in the conduct of the Commonwealth Games of 2010, or for that matter the contentious issues of gas pricing and favours to a private gas producer, it is the CAG who has set the cat among the pigeons.

 

The arc of containment has been extended by the growing power of two other sets of players. Non-government organizations (NGOs) of all shapes and sizes, usually manned by activists who have the patience and commitment to sift through masses of data to expose government claims, have influenced and altered public debate on issues ranging all the way from the environment to civil liberties, from public health to cases of crony capitalism.

Finally, there is the media, which now has greater penetration because of growing literacy, and also the relatively new power of private cable and satellite television which reaches more than half the 250 million homes in the country. While the aggressive culture of television news anchors is widely decried, and the subject matter of many TV programmes surreal, it is also true that more substantive debates seem to take place in TV studios than in Parliament, which in recent sessions has tended to get deadlocked over peripheral issues that prevent debate of any kind. As Parliament meets on fewer days each year, and transacts less and less business, the public space has been taken by the media and by activists – a clear case of the political class ceding ground to new players, so much so that the government at one stage was forced to negotiate the contents of a proposed Lokpal Bill with a group of activists gathered under the ‘India Against Corruption’ banner.

The arc will become a complete circle of containment only when at least two more things happen: a Lokpal law is finally enacted that allows any citizen to take up a corruption issue with an ombudsman, who in turn has the power to turn to an autonomous investigating agency that is not controlled by political masters as the Central Bureau of Investigation is. The Lokpal Bill (in whatever form) may well become law some time in 2013, and it is then hard to see how the essential corollary in the form of an autonomous investigative agency will not also be born. Should these two become reality, the rich and the powerful will be forced to realize that they are not above the law – as they de facto have been these past many years.

 

But no one should make the mistake of thinking that India is now certain to move into its own Progressive Era. A significant factor to be taken into account is the fact that the oligarchs in India are still riding high, just as robber barons did in the US during its Gilded Age. The Indian state captured the ‘commanding heights’ when it nationalized the financial sector – the major banks in 1969, followed by the general insurance companies in the early 1970s (life insurance was nationalized in 1956). Business therefore had to run to the government and its agencies for any money that it needed, for working capital or project finance, especially since little capital could be raised directly in the capital market. The leading business houses – Tata, Birla, Dalmia-Jain, etc – also used to own the leading newspapers, but that too changed with time. Now the process is being reversed. Leading businessmen like the two Ambanis and Kumar Mangalam Birla control or have invested in newspapers and TV companies, directly and indirectly, and have set their sights on owning banks too, with the government pressing the Reserve Bank to hurry up and issue new banking licences to leading businessmen.

The coming fusion of corporate, financial and media power, along with the substantial influence that many business houses already wield in the legislative sphere (indeed, some businessmen have got themselves elected to Parliament), signals a new apogee for oligarchs, whose negative potential can be seen in Russia and elsewhere where they have bent the state to their will, preempted resources and prevented fair competition.

 

That brings up the elephant in the room, political corruption, which was a major element of America’s Gilded Age. Vital reforms introduced in the Progressive Era included the democratization of politics. Till the early years of the 20th century, US senators were elected indirectly by state legislatures – as members of the Rajya Sabha still are in India. As in India, this meant that party bosses had control of who got the party ‘ticket’. The 17th amendment to the US constitution changed this, to say that senators would be directly elected by voters in a state. A second change was equally important; presidential candidates had to fight their way through the primary system. Both presidential and Senate elections thus became bottom-up processes, not top-down; in effect, this cut the ground from under the feet of party bosses who ran political machines and who used their power to cut corrupt deals.

The parallels with India’s situation today are obvious; so are the solutions. Indeed, it is interesting that Rahul Gandhi, in his initial attempt to reform the Congress, talked of introducing bottom-up elections, rather than having party ‘leaders’ like himself imposed from above. That the initiative has got nowhere is perhaps as much a comment on Gandhi’s political acumen as on the system’s resistance to change; Rahul Gandhi has now been put in charge of the preparations for the 2014 Lok Sabha elections, and so far there is no sign that he will make his party candidates demonstrate ground-level support in a constituency through a formal process.

 

Indeed, the only significant political reform measure of the past few decades has been the passing of the anti-defection law, in 1985. Meant to put an end to the widespread problem of individual legislators changing party alignments, often in response to inducements of various kinds (the unstated objective was also to protect Rajiv Gandhi’s record haul of 405 MPs), the new law solved one problem but created another. One can’t really term it an unintended consequence, because the flip side of preventing defections was to strengthen the position of the party boss(es), thereby making inner-party democracy a sham and reducing legislators to so many sheep forced to flock together.

What was unquestionably an unintended consequence, as the former Rajya Sabha member Bimal Jalan has argued in one of his books, is that the incentive for being the boss of a breakaway party was now much greater than for being one of many leaders within the folds of a larger party. Mamata Banerjee as the sole leader of the Trinamool Congress can cock a snook at those in power in New Delhi, in a manner that she could never have hoped to do if she were still in the Congress. Sharad Pawar has more room for manoeuvre as the leader of his own party than as someone in the Congress (among other things his daughter and nephew can be his political heirs!). Similarly, Jagan Mohan Reddy as the sole leader of his YSR Congress party in Andhra Pradesh has much more bargaining power today than when the Congress ‘High Command’ asked him to be just one of many party leaders in the state.

 

So the anti-defection law has strengthened the hands of the leaders in the Congress, but weakened the party; it has also strengthened (indeed helped create) the regional satraps and thereby given birth to the new age of coalition governments at the Centre. Note that no party has won a Lok Sabha majority since the anti-defection law was passed; whereas the Congress could well have been within shouting distance of a majority if Pawar, Banerjee and other breakaway groups in Andhra (including Telengana), Haryana and elsewhere were still in its fold, holding down anything up to 240 seats on its own. Instead, state satraps can and do hold dependent governments in Delhi to ransom, and they can pretty much rule their states as they want, including starting their own mini-dynasties in imitation of the Congress.

The bizarre result is presidential-style politics in many states, where the chief minister is the fountainhead of all power, and a Westminster system in New Delhi where the prime minister is at the mercy of the pulls and pressures coming from state party bosses. This reflects the medieval power structure of pre-Tudor England in the 15th century, when baronial power depended on how many horsemen (MPs in today’s context) each baron could bring to the king’s army, and the king was dependent on these for fighting his battles. Henry VII took effective steps to destroy the power of the barons.

In the US, political reform destroyed the power of party bosses. In India, it has been exactly the opposite; party bosses have become masters of all they survey, and thereby political corruption has been entrenched much deeper in the system. If large-scale corruption in India is to end, the role of the party boss has to become contestable and his conduct accountable, while elections have to be a process that starts from ground up. This, unfortunately, remains a distant prospect.

 

Meanwhile, technology offers a partial solution to the widespread problem of petty corruption, which scars the government-citizen interface. The corruption isn’t really petty, because the government spends many hundreds of thousands of crores on a variety of income transfer schemes – food subsidy, fertilizer subsidy, old age pension, widows’ pension, kerosene and cooking gas subsidy… It is widely recognized that much of this money is misdirected or lost in transit, so to speak, or subject to such heavy overheads that the intended beneficiary gets only a tiny part of the money that the government spends. Rajiv Gandhi famously put the figure at 15 per cent. The finance minister said more recently that it costs the government Rs 3.75 to deliver one rupee of benefit. This is no accident; leakages are often designed to feed the bottom rungs of different political machines (kerosene leakage and its diversion to adulterate petrol and diesel cannot really be an ‘unorganized’ business, it needs political protection), so there are substantial vested interests involved.

The great white hope on this front is of course the Aadhaar programme, designed to deliver a unique identity number to every resident, a number that can be used to open simple bank accounts into which money can be transferred. The programme is still in the early stages of a roll-out (less than a sixth of the population has been covered), so the Congress may be jumping the gun in thinking that this might be its meal-ticket in the 2014 election. But Aadhaar has the merit of doing away with costly replications of existing distribution systems (as for food), avoiding the distortion of product and factor markets, and dramatically reducing overheads and thereby saving the government a ton of money at a time when the fiscal deficit is bloated.

Aadhaar to some degree tackles but does not do away completely with the problem of mis-targeting through wrong selection of beneficiaries. The bigger danger, however, is that it makes it easy for politicians to promise bigger and bigger payouts, because the complications of product delivery are absent. If one party promises a monthly payout of Rs 2,000 to all poor households, another can promise Rs 5,000 and a third can promise Rs 10,000. The political pressures that have led to repeated and large-scale loan write-offs, promises of free power and free water, and now free bicycles, TV sets and laptops, could well result in even less restrained scorched-earth fiscal policies, in the search for votes.

 

Without a cast-iron law that caps the scale of such income transfers to two per cent of the GDP (as proposed by Pranab Mukherjee in his 2012 Budget), the risk of more unintended consequences is very real. Meanwhile, it is worth noting that other technology-enabled solutions (for delivering ration cards, driving licences and passports, and getting property records, to take some examples) are making processes simpler, quicker and more transparent, thus making a noticeable difference to the government-citizen interface.

India is in a halfway house. Corruption has caught the system in a maelstrom, enmeshing what was a rapidly growing economy, and laying bare the moral bankruptcy of the political class. It is not yet clear that the political class recognizes, even dimly, that the old way of doing business may not be sustainable for long. But that is the emerging reality, and the slightly longer arm of the law has already reached quite a few who might have thought they had political immunity.

Some new defences against blatant corruption have been erected, and more are needed; these may yet become reality – especially if inchoate responses to corruption like the agitations launched by Anna Hazare and Arvind Kejriwal become more organized efforts, and gain traction as the growing middle class gains voting clout. While it would be naive to believe that all corruption will end, the risk-reward equation has changed and could change some more.

 

Has the tipping point been reached, where one could argue that the Indian scene reflects more of the Progressive Era and less of the Gilded Age? Perhaps not, but despite the birth and growing power of home-grown oligarchs, the system is moving in the broad direction of positive change and not descending into a Russian-style kleptocracy that overrides all institutional checks. After four years of almost endless scandal when oligarch- and politician-driven kleptocracy seemed to be unchecked, this is something to be grateful for. The critical next step will come if one or other major political party (and it can be either the Congress or the BJP) starts to believe that there may be genuine electoral mileage to be gained from adopting an anti-corruption platform, not as a pretence or as a stick with which to beat the rival, but out of the realization that the rules of the game are changing, and that it is better to get ahead of the curve rather than be stuck behind it.