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

Author

Listed:
  • 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.

Suggested Citation

  • Pethe, Abhay & Tandel, Vaidehi & Gandhi, Sahil, 2012. "Unravelling the anatomy of legal corruption in India: Focusing on the ‘honest graft’ by the politicians," MPRA Paper 39306, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39306
    as

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    File URL: https://mpra.ub.uni-muenchen.de/39306/1/MPRA_paper_39306.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. James E. Alt & David Dreyer Lassen, 2002. "The Political Economy of Institutions and Corruption in American States," EPRU Working Paper Series 02-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    3. Sambit Bhattacharyya & Raghbendra Jha, 2013. "Economic Growth, Law, and Corruption: Evidence from India," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(2), pages 287-313, June.
    4. Lessmann, Christian & Markwardt, Gunther, 2010. "One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats," World Development, Elsevier, vol. 38(4), pages 631-646, April.
    5. Pethe, Abhay & Gandhi, Sahil & Tandel, Vaidehi, 2011. "Assessing the Mumbai metropolitan region: a governance perspective," MPRA Paper 39354, University Library of Munich, Germany.
    6. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
    7. Naved Ahmad & Oscar Brookins, 2004. "On Corruption and Countervailing Actions in Three South Asian Nations," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(1), pages 21-30.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Corruption; asymmetric and private information; private gains;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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