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Unravelling the anatomy of legal corruption in India: Focusing on the ‘honest graft’ by the politicians

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  • Pethe, Abhay
  • Tandel, Vaidehi
  • Gandhi, Sahil

Abstract

Corruption in India is ubiquitous and may be broadly identified as illegal and legal. This paper delves into the typology of legal corruption in India, which, apart from abuse of discretionary power, and tactical law and policy making, also includes – not so well documented – use of information advantage and the externality impact of such information by politicians to make gains. The paper, by analyzing the growth rates in assets of some politicians in the Mumbai Metropolitan Region, finds that the elected politicians experience a higher growth in their assets as compared to the market growth. The findings strongly support the existence of this form of legal corruption in India. The paper recommends that practices of ‘misuse’ of information advantage by politicians to make legal gains could be reduced by enforcing greater transparency via dissemination of relevant information in public domain. These measures must be backed by broad based reforms – that are commensurate with the current level of economic development – that would bring about system-wide changes in an effort to lower overall corruption in the country.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39306.

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Date of creation: 26 May 2012
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Handle: RePEc:pra:mprapa:39306

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Keywords: Corruption; asymmetric and private information; private gains;

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References

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  1. Christian Lessmann & Gunther Markwardt, 2009. "One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats," CESifo Working Paper Series 2662, CESifo Group Munich.
  2. Pethe, Abhay & Gandhi, Sahil & Tandel, Vaidehi, 2011. "Assessing the Mumbai metropolitan region: a governance perspective," MPRA Paper 39354, University Library of Munich, Germany.
  3. Sambit Bhattacharyya & Raghbendra Jha, 2013. "Economic Growth, Law, and Corruption: Evidence from India," Comparative Economic Studies, Palgrave Macmillan, vol. 55(2), pages 287-313, June.
  4. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," ULB Institutional Repository, ULB -- Universite Libre de Bruxelles 2013/7364, ULB -- Universite Libre de Bruxelles.
  5. Naved Ahmad & Oscar Brookins, 2004. "On Corruption and Countervailing Actions in Three South Asian Nations," Journal of Economic Policy Reform, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(1), pages 21-30.
  6. James E. Alt & David Dreyer Lassen, 2002. "The Political Economy of Institutions and Corruption in American States," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 02-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  7. Aidt, Toke & Dutta, Jayasri & Sena, Vania, 2008. "Governance regimes, corruption and growth: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 195-220, June.
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