‘I Will Give You Nothing for That’

Corruption has long been the dead weight stymieing the economies of many developing nations. However, a new economic program in India, sponsored by the good-governance group, 5th Pillar, offers an innovative new way of fighting this scourge—through individual acts of resistance. 5th Pillar is creating and distributing “zero-rupee notes” to citizens across India; when asked for a bribe, individuals hand over a zero-rupee note instead. This efficient and cheap initiative has already met considerable success in fighting bribery. Further anti-corruption efforts in the developing world should emulate the zero-rupee note’s strategy of addressing the social norms underlying corruption; such efforts will be more effective than initiatives that have aimed to combat corruption through structural adjustments.

Numerous studies have found a strong correlation between high corruption and lower economic growth, as corruption creates an invisible tax on all economic activity. It hurts trade, investment, the effectiveness of government expenditure, and, critically for developing countries, the prospects of innovation. This problem is very salient in India today; the 2009 Transparency International Corruption Perceptions Index ranks India as a dismal 84th, a distressing result for the world’s second-fastest growing economy.

The zero-rupee note attacks this social problem through social, rather than political, means. Various news sources have reported that officials are often shocked and shamed when given the note and quickly perform the necessary service without a bribe. One man who was overcharged for a car-parking fine, Ashok Jain of Chennai, immediately shamed the attending policemen into charging him the correct fee by handing them a zero rupee note, and an old lady who had been fighting for a land title for years gave the note to a local official and finally received the document after over a year of delays.

Thus, a project that initially began in 2007 with the distribution of 25,000 notes in the southern state of Tamil Nadu “met with such high demand” that 5th Pillar has now given out close to one million notes and is expanding the program from its initial starting locale in southern India.

The zero-rupee note program works because corruption is often a product of social norms. As development efforts go forward, such efforts to change social norms should be emphasized above ineffective structural reforms that paper over persisting problems. India has had legal structures meant to fight corruption since the country’s inception, but in the words of Kennedy School professor Lant Pritchett, “the de jure process no longer has any real claim on the behavior of the agents of the state, who are following a different de facto set of procedures” that have basically institutionalized corruption. Even new elected officials or new laws will not change the expectation that a bribe needs to be paid to get something done.

Additionally, the World Bank has emphasized that “social norms transformation is the key to fighting petty corruption.” To really change the way the system works, countries need to change the attitude that corruption is an expected feature of interaction with government. And as a recent Boston Globe story notes, game theory models have shown that it only takes a few actors demanding honesty to fundamentally change a corrupt system.

The small, symbolic act of refusing to bribe in the same manner as thousands of other people has emboldened many individuals in India and thus anti-corruption advocates throughout the developing world. Whether taking the form of a zero-currency note or uniforms without bribe-holding pockets, innovative measures to reduce corruption can remove some of the final shackles that are holding back the growth of developing countries. As the zero-rupee note program shows, a devoted group of individuals with creative ideas does not need a large budget or major political supporters to change the economic culture of a country.

Ravi N. Mulani ’12, a Crimson editorial writer, is an applied mathematics concentrator in Pforzheimer House.