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Paying Zero for Public Services

blogs.worldbank.org

75 pointsArun200910 comments

Interesting. The summary is that this non profit prints and distributes these things that look like money that they call the "Zero Rupee Note" -- it's like bill with a zero on it. Poor people can give these to corrupt officials to protest the bribes they want.

A priori, I would have thought this was worse than pointless, because giving corrupt officials these notes is sort of biting sarcasm. Wouldn't it be better to just say no?

Well, according to the article, they work. The reason, agains according to the article, is that officials can potentially get in a lot of trouble for taking bribes, so they are likely to cave to someone who doesn't play ball. The difference between refusal to pay and paying with the fake bill is that the people actually /use/ the fake bill since the perception is that they have the backing of this large non profit, versus them fighting back alone.

If the article is accurate, the whole concept is quite interesting.

I am reminded of the tradition in Chicago that when you bribe an alderman or judge to do you a favor, you put the dirty money in an envelope and put the envelope on the table. It seems that even among public servants who are as crooked as a dog’s hind leg, there is some residual shame at taking bribes, which expresses itself as an unwillingness to touch the bribe with bare hands.

(But maybe I’m reading too much into that tradition: last year, a Boston city councillor was videotaped by the FBI stuffing cash into her bra.)

I don't think it's shame; just practicality.

If I'm about to hand someone a large sum of cash, it's generally not practical to carry that in my wallet. Plus, that money likely came from, or is going to, someone who also doesn't want that money mingling with "their" money. (likely someone who will be dealing with several such envelopes)

And, in general, you don't want to have more money than you owe in front of you, while you count out a criminal's portion. If you do, you'll quickly find that prices go up.

There's also plausible deniability. Stacks of cash attract more attention and aren't as easy to explain away as envelopes. And envelopes of cash have the hallmark of the legitimate proceeds of a cash-only business 'on its way to the bank'. If the money is mingled with your own, that's a harder argument to make.

While I can appreciate this as a "hack" to get stuff done in India, it seems a bit unnecessary. As others note, the reason why this works is that it's an implicit threat.

The better alternative is to address the underlying reasons for a lot of the corruption - and that's excessive regulation and costs to register and conform with the law. There's been a lot of work in this area with respect to legal versus off the books capital (e.g. Mystery of Capital by Hernando De Soto). You can quite easily see the plight of the entrepreneur/individual by looking at the World Bank's Doing Business reports - here's India's - http://doingbusiness.org/ExploreEconomies/?economyid=89

e,g.: it takes 13 procedures and 30 days to formally start a business in India versus 6 procedures and 6 days in the US.

This obviously isn't just India either. Most developing countries are like this. It's through regulations and compliance that government officials can seek graft. Streamlining has the effect of not only reducing corruption but making any form of transaction with the state far more efficient resulting in higher growth (there's a positive relationship between GDP growth and better rankings on the World Bank's doing business index).

I agree. But I think that implicit threat can also help to change the perceived public climate.

Actually, in many US states in order to start the simplest kind of business all you have to do is file a form (at no cost) online.

The World Bank should have titled this something along the lines of "Corruption blah blah blah", instead of "Paying Zero for Public Services".

That's a very interesting model. Iran is another country that would benefit from this.

Everyone from the traffic cop, health ministry inspectors, the 'bill' collector all the way up to the courts system can be bought for the right price.

It is so accepted and deeply rooted into the current system that as a foreigner you will not get anything done, because you simply don't speak the same lingo or understand the hints. Apparently when the traffic cop pulls you over for speeding and asks for a 'light'.. thats signal to give him money and have a good day. (I was a passenger in this car)

It's a shame because good people get sucked into it as well. no body wants to be left behind when the only way to progress is to pay 'dues'.

Pic of the money: http://blogs.worldbank.org/files/publicsphere/rupees_front.j...

Looks like india has invented the zero all over again. Hope it works. Much needed.

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