India's Anti-Corruption Protests: All Sound and Fury

Indian reformers miss an opportunity to address the real causes of corruption.

As the Arab Spring blooms in the Middle East, India has been experiencing a summer of rage. The whole country has been engulfed in anti-corruption protests rarely seen since Mahatma Gandhi launched the Quit India movement to boot out the British. But corruption might prove to be a more tenacious foe than the Brits.

Even though Anna Hazare, the septuagenarian leader of the movement, has brilliantly mobilized mass sentiment, this might unfortunately turn out to be one big missed opportunity.

Protests are like morning ablutions in India's cacophonous democracy: routine and purgative. One can't sneeze without running into a demonstration by some interest group fighting for some special benefit. But the Hazare protests were not about government handouts. They were about government oppression. Hundreds of thousands rallied around him in New Delhi, where he launched a 12-day hunger strike to shame the obdurate ruling party into accepting his anti-corruption bill. Remarkably for a society riven with caste, class, and religious divisions, the protesters came from all walks of life—young and old; rich and poor; lower castes and upper castes; Bollywood celebrities and fans; bribe givers and bribe takers—to collectively register their revulsion against a system that, like polluted air, is dirty but inescapable.

Corruption pervades every facet of life and every rung of society in India. It is impossible to conduct government business—obtain birth certificates, death certificates, marriage licenses, driver's licenses—without bribing petty bureaucrats who can otherwise bury simple requests beneath their voluminous rulebooks forever. But the current protests were triggered by a series of corruption scandals involving officials at the highest levels. The organizers of the Commonwealth Games debacle skimmed funds. Ministers in the southwestern state of Karnataka shipped millions of tons of iron ore to China at throwaway rates for kickbacks. The last straw was the scandal last year in which the telecom minister sold 2G broadband access to a billionaire at a tenth of its actual value, costing the public treasury $40 billion.

The genius of Team Hazare lay in tapping public disgust at its peak to engineer a major cultural shift: Politicians will no longer be able to count on Indians' legendary "whatever" attitude to get away with bloody murder. But Hazare's corruption-fighting proposal itself might do more harm than good.

Its core demand is that the government create a Lokpal (an ombudsman's office) accountable neither to courts, legislature, or voters and give it total discretion to identify, investigate, and prosecute any public official (including the Prime Minister, MPs and judges) suspected of corruption. The office would be made up of civil society leaders—not politicians — with a track record for honesty.

The logic of the office is easy to understand: It can't rid the system of corruption if it has to hew to it. But power corrupts and absolute power corrupts absolutely. It is unimaginable that an office with so much unchecked power wouldn't eventually become corrupted or tyrannical or both.

Even some of the good elements in the Hazare proposal are unworkable. For example, it wants "citizens' charters" prominently displayed in government offices notifying citizens of the time it would take to fulfill their requests. In the event of delays or demands for bribes, citizens could complain to the Lokpal that would punish officials in charge. But one agency can't effectively deal with the volume of grievances it is likely to receive. Alternatives to the Hazare proposal suggest creating mini-Lokpals at the municipal level. But all of them suffer from a fatal flaw: They treat corruption like an enforcement rather than a policy problem.

The depressing thing about India is that after it liberalized its economy in the 1990s, corruption actually increased—not decreased. That's because deregulation only applied to a few industries. It never extended down to the self-employed poor: rickshaw-wallas and street vendors continued to face shakedowns by the police and other functionaries of the License Raj. Nor have irrational laws—such as registration fees that allow the government to confiscate up to 10 percent of the sale price of a house—ever been reformed, breeding wide-scale cheating and tax evasion. What's more, the post-liberalization economic surge has increased the value of the resources that the government owns, vastly increasing the volume and scale of the deals that politicians and industrialists illegally cut. No surprise, then, that more than half of India's Members of Parliament now are millionaires—and a quarter have criminal records.

Eradicating corruption will require more than simply adding yet another layer of bureaucracy, however. So long as government officials have too much to gain from dishonesty—and citizens have too much to lose from honesty—corruption will remain a fact of Indian life. Reversing those incentives will require completing India's liberalization through further deregulation, a rapid divesture of state assets under strict transparency, and ongoing tax reform. But Team Hazare has no plans to tackle much of this.

The British left India 64 years ago this month. India no longer needs a revolution to clean out the rulers. It needs a revolution to clean up the rules.

Reason Foundation Senior Analyst is a columnist at The Daily, America's first iPad newspaper, where this column originally appeared.