Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

[Discuss] Can corruption be good for the economy?

We have been talking about Ease of Business and what not, right! Let’s take a quirky detour around the murkier waters and try to answer the question above in the Indian context.


Of course, we are not talking about those sinister, outrageous corruption marathons, but what if we say this – a bit of controlled malfeasance can work like a lubricant that makes it easier for us to address some of our most pernicious social ills.

The Fortune begs you to think – 

Most of us fail to imagine that corruption can also grease the wheels of prosperity. Yet in places where bureaucracies and organizations are inefficient (meaning entrepreneurs and big firms struggle to transport or export or comply with regulation), corruption could improve efficiency and growth. Bribes can act like a piece rate or price discrimination, and give faster or better service to the firms with highest opportunity cost of waiting.


Although, there is an equally important world view which says this – 

  1. Most of the time, corrupt officials are like parasites that feed off society and benefit only themselves.
  2. Furthermore, as corruption becomes more prevalent, ethical people lose faith in the system and are sapped of their drive to work honestly.
  3. But it’s important to understand that because we live in an imperfect world, a bit of controlled corruption can function as a lubricant to overcome some of our worst problems.

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