Are anti-corruption movements essentially anti-growth?

Here is an argument which is getting louder by the day. It runs like this. Most developing countries like India are at a stage of growth where new entrepreneurial energies are being unleashed, and hence in the larger interests of growth, one should overlook the corruption which goes with it.

Those arguing say that such levels of corruption had been witnessed in developed countries earlier, and as processes become more transparent, corruption would go away on its own. They also claim that the movement to a mature economy takes time, and one cannot wish corruption away overnight. Most of the corruption is linked to the bureaucratic and political process and hence cannot be reformed in a jiffy.

So this argument gets further fine-tuned to say that the anti-corruption movement in the country is going too far and has merged into the 'anti-growth' brigade. Then the blame for the slow growth of the economy can be placed on the door of the anti-corruption movement.

So if you want growth, you better be prepared for some corruption. And even if you see lot of corruption, you should not be protesting against it, as it might only hamper growth. Such a convoluted argument has its takers.

Now, noted economist Jagdish Bhagwati, speaking recently at a seminar is setting things right with his argument.

He says that the country is in the cusp of change and that so many people are fed up of corruption that has been going on for some time, and are now not willing to make any concessions. This is what is leading to street demonstrations on corruption on a massive scale.

This, he says is creating 'macro-economic problems' because whatever the government does, whether right or wrong, and whether the money had changed hands or not, it is 'going to be challenged by somebody in the streets and in parliament'.

Government policies are seen as a source of corruption and as he points out, that whatever the government does, like accepting a tender, might be seen that it has 'taken money on the side'.

This is the logjam which is leading to the slowing down of the decision making process and the 'reason why growth has slowed' in India.

The story is clear. An robust anti-corruption movement, might slow down growth for the moment, but the resolution of the grievances and an increase in transparency will propel the economy in its next phase of growth. Growth, needs not only to be inclusive, but should be be seen as an outcome of a fairly transparent process.

But without a political consensus, and a clarity on how these 'tenders' are being given out, the anger on the street may not subside. Growth and investment will also avoid 'angry' places. So don't blame the man on the street for poor economic growth.

The above is from "I Paid a Bribe.com"

How ingenuous the BJP and Congress with likes of Mayawati, Mulayam, Sharad Pawar and Karunanidhi become in promoting corruption.

Why shouldn't they when they have able supporters like Kapil Sibal and P Chidambaram.

However, let me tell them that people are fed up of corruption and these arguments will not hold.

The AAP is now ready to replace them and provide corruption free government.