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Saturday, April 14, 2012

With all the corruption scams bouncing around, is it time to focus on the economics of political careers instead? | LinkedIn Answers | LinkedIn

With all the corruption scams bouncing around, is it time to focus on the economics of political careers instead? | LinkedIn Answers | LinkedIn



With all the corruption scams bouncing around, is it time to focus on the economics of political careers instead?





Why are we surprised with all the corruption coming to light nowadays....it takes an annual expense about $250 million to keep a national party like the INC or BJP running and contesting all the federal, state and local body elections that keep coming up.


Considering that officials can expect only low single digit percentages of contracts and deals as bribes and kick backs, to raise these kind of funds, the government executives have to resort to messing up with deals worth more than $50 billions every year. More damaging than the bribes is the plethora of rules that are created to build opacity into the system in order to facilitate easier bribe taking. It surely costs the economy a few percentage points of GDP growth every year which is huge compared to the actual bribes collected.


It is time we stop pretending that political careers are motivated by a sense of national service. They are just like any other pursuit of livelihood and therefore demand a healthy return on investment. The sooner we drop this hypocrisy, the easier it will be to address the culture of corruption.


One way could be to incentivise political parties for the good running of governments...say by paying them a percentage of the incremental GDP above a certain threshold. For example the party running the national government could be paid 5% of incremental GDP above the last 5 year average. If the increase in GDP is 3%, then 5% of that is $250 million which would be quite attractive. Another 5% could be earmarked for state governments.

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