Maybe Some Bribes Should Be Legalized

Especially since it’s already legal to bribe corporations, and public sector entities. But let’s back up for a minute.

A recent article in The Economist that asks who to punish notes that India’s chief economic adviser wants to (partially) legalize some kinds of bribe-giving. And while your first thought might be bribes are bad, m’kay, it’s actually not a bad idea.

First of all, as Kaushik Basu (who is the chief economic advisor to India’s finance ministry) points out, it’s hard to combat bribery and corruption when the law treats both bribe-giving and bribe-taking as crimes. If someone needs a basic service to be performed on their behalf, and they believe they can only get it by giving a bribe, they will pay the bribe. And they won’t report it because then they can be prosecuted.

Secondly, the bribes he is proposing to legalize are “harassment bribes”, made by a person to get things done to which he is legally entitled. Like filing a police report or getting his tax return processed. Furthermore, Mr. Basu is also proposing that it would still be illegal for the individual demanding the bribe to perform the service to take the bribe. The bribe-giver would be able to file a complaint, and if proven, would be entitled to a refund while the corrupt official would be punished. Moreover, bribes made to bend rules in one’s favour would continue to be illegal for both parties.

This isn’t a bad proposal. First of all, it will make a corrupt official think twice before asking for a bribe knowing that it is much more likely he’ll be reported since it will no longer be a crime for the bribe-giver to give a bribe to facilitate a service to which he is entitled.

Secondly, most “civilized” countries have already legalized such bribes when made to a corporation or a public body. We just call them service payments. Don’t want your package to take four days to go from point A to point B when you know it only takes one, pay an expediting fee. Want more leg room, and actual food, on your flight? Pay an upgrade fee and sit in first class. Don’t want to wait 6 weeks for your passport renewal? Pay the expedite fee and get it in 3 weeks. In each case, you’re getting the exact same service. The only difference is time. Pay less, and you are put in the bottom of the queue. Pay more, and you are moved to the top of the queue. And instead of paying a person directly, you’re paying an organization, which then pays it’s shareholders and executives more money. And even though you don’t pay an individual directly, the individual who sells you the upgrade still benefits. They get to keep their jobs, which they would lose the minute revenue and/or profit drops below a certain threshhold.

Finally, in some countries, low level public servants, just like waitstaff in “civilized countries”, are not paid a living wage and need bribes to support their families. Making facilitation payments legal makes sense in those countries where foreigners have no choice but to pay bribes if they want to do business. One way or another, service has to be paid for. And if someone is truly corrupt, you want to make it possible for those impacted to complain without repercussion (unless they are seeking to break the law themselves). Mr. Basu’s proposal may not be perfect, but it certainly is clever.