Societies with greater economic freedom have lower corruption

And India must focus on economic freedom

In the light of the current debate over the solution to corruption, here’s something to think about. There is a correlation between higher levels of economic freedom and lower perceptions of corruption. Here’s an old chart that shows the relationship. It uses 2006 data, but it should hold with newer data as well (Update: Barbarindian has a chart with the latest data, LT @centerofright).

Economic Freedom vs Corruption Perceptions
High economic freedom correlates with low corruption

(Click on the chart to enlarge it.)

This chart shows a correlation. And correlation does not mean causation (OMIPP alert!). In other words, from these data alone, we cannot conclude that higher economic freedom causes lower corruption. We can, however, conclude that wherever there is greater economic freedom, perceptions of corruption are lower, and vice versa,

The question is: which variable should we focus on? There are enough rules, laws and agencies to investigate and prosecute corrupt officials. Clearly, there is overwhelming dissatisfaction over the efficacy of this method. There’s nothing to prove that one more super rule, super law and super agency will do the trick where so many others have failed. Indeed, it is likely to worsen the problem by adding to the red tape and logjam.

It therefore makes sense to shift focus to economic freedom. It’s worked to reduce corruption in India in some fields. You don’t have to bribe the telecom department officer and the line-man to get a phone connection anymore. That’s because there is relatively more economic freedom in the sector: from infrastructure to services, from retail to equipment, there are multiple providers. You have the freedom to choose, the freedom to switch and the freedom to reject phones, plans and providers.

But when the UPA government sought to curb economic freedom—by the blatant abuse of executive power—there was massive corruption.

Indeed, in sectors where there is relatively more economic freedom, corruption has generally been “kicked upstairs”, as this article in Pragati shows. In the 2G spectrum case, it was not prevented and punished in time by a man of well-known integrity. This should be an indictment of that man rather than the system.

Related Link: The 2011 Economic Freedom of the States of India shows how states that have greater economic freedom do better in a wide range of governance outcomes.

Why are we involved in UN peacekeeping?

The unasked question

Omair Ahmad’s article on the ugly business of Indian blue helmets in the Congo is titled “rotten olives”. He raises the most important point:

That shining reputation will be in tatters if the current charges of misconduct by Indian peacekeepers in the Congo are proved. The Indian government has assigned Lt Gen Rajinder Singh to investigate the charges, but nobody seems to be taking a look at the purpose of India’s role in UN peacekeeping operations today. Without a clear reason to be participating in such operations, India runs the risk of being lumped together with other developing nations who join these UN missions only for the money and perks. [Outlook]

It’s time for India to stop contributing troops to the UN.

Time to stop contributing troops to the UN

The shame in Congo

What the ‘BBC’ found in its investigation of UN peacekeeping operations in the Democratic Republic of Congo is deeply disturbing. The accusations are serious:

Indian peacekeepers operating around the town of Goma had direct dealings with the militia responsible for the Rwandan genocide, now living in eastern DR Congo.

The Indians traded gold, bought drugs from the militias and flew a UN helicopter into the Virunga National Park, where they exchanged ammunition for ivory.[‘BBC‘]

The Indian High Commission in London has reflexively tried to put a brave face over the allegations, pointing out that the offences are trivial, and that disciplinary action will be taken against those found guilty. But this is not the time for the defence ministry to merely go through the routine of setting up panels of inquiry and acting against errant personnel. This is the time for a wholesale re-evaluation of the entire policy of contributing troops to the UN.

The main draw of a UN peacekeeping posting for army personnel is the financial reward. The point that it exposes troops to real conflict environments is bogus: there are too many conflict environments on India’s borders, certainly enough to give the armed forces the desired combat experience.

It would have been quite acceptable to allow Indian soldiers to derive financial benefits if only the UN peacekeeping operations had anything like the discipline, quality control and governance that are the practice in the Indian armed forces. Poorly defined rules of engagement, unclear chains of command, a hodge-podge of equipment and personnel from assorted ‘developing countries’ and great power apathy have bred a culture that allows and covers up errant behaviour.

Needless to say, the armed forces must act to investigate and deal exemplary punishment to those found guilty—not just troops and their immediate officers, but their commanders up the hierarchy as well. The organisational challenge for the armed forces headquarters is to root out the culture of corruption that has seeped in from the UN engagement. Without a complete cleanup, the risk to national security is immense.

While it is too early to conclude that the Indian troops are guilty, the accusations are serious enough. India should immediately suspend all further deployments under the UN flag. This should be followed by a phased withdrawal of all Indian troops currently carrying out UN peacekeeping duties around the world. [See this post on Pragmatic Euphony]. Overseas troop deployments must be seen in the context of promoting the national interest. But that is not the case today. Contribution to UN peacekeeping contingents is not part of any broad strategy: it continues to be done because it is something that has always done (and those that have to do it see it in their interests).

Related Posts: Regarding the troops in Congo; get the troops out of Lebanon;