Corruption in India: A Non-Western Perspective

A Project Proposal Submitted by the Research Centre Vergelijkende Cultuurwetenschap

(March 2008)
1. Present status of scientific knowledge as we see it now: In India, the newspapers are full of stories
about corruption (Grover and Arora 1997, PTI 2008, Thakur 2008, Varadarajan 2008).
Commons sense tells us that it is not difficult to find somebody who is on the take. In the
business-to-business corruption, an entire hierarchy demands suitable homage from their
suppliers, mostly small-scale businesses themselves. Almost every politician appears to be
corrupt (Halayya 1985, Bhatnagar and Sharma 1991) and the same applies to almost
everyone in the government services from the high-ranking officer to the lowest of the
door attendants (Das 2001, Srivastava 2001). Adding to these descriptions, there are also
the greasing palms to get seats in fully booked theatres, private hospitals, on trains and
private airlines, or to gain entry into the educational institutions. Taking together all these
forms of corruption and considering the black market as well, it is anybodys guess as to
how many Indians are corrupt (Sardar 2001). Corruption as experienced in India seems to
be as ubiquitous as the air people breathe (Gupta 2001). According to Transparency
Internationals Corruption Perceptions Index 2000, India occupied the 69th place in the list
of least corrupt countries; in 2005, it sank to the 88th place (http://www.transparency.org).
Of course, the number of countries increased in these years, so the changing of place might
not be an indication of an increased perception of corruption. However, the impression one
gets from the literature is that corruption in India has been growing phenomenally since
Independence (Visvanathan and Sethi 1998). Looking at this increase, one is inclined to
conclude the following: since Independence, we have witnessed a social structure that, left
on its own, enables such a rapid growth. The Indian soil, so to speak, seems to be very
conducive to the growth of the phenomenon. It seems to be a cancer that eats into the
innards of the country. Although we do not like to say it openly, it appears as if, since the
British authorities left, the society has had no effective immunological mechanisms to fight
the growth and, on the contrary, has stimulated the growth. Suppose we continue this
analogy of a growing cancer, we seem to have to conclude the following: if (a) the growth of
a cancer is caused by the cells of an organism and if (b) the people of India constitute the
cells of India, then (c) the people of India become the agents who create the growth of
corruption in India of course, a person is a fool not to take bribes, only in a situation
where everyone else takes bribes. That is to say, the situation must be such that the social
and moral principles of the society support the habit of taking bribes. In todays India, it
seems as if one does not need to be of a morally lower status, intellectually disadvantaged
or a criminal to be corrupt. The contrary seems to be true: according to the modern
descriptions of India, it seems to be rational to be corrupt.

One of the first authors to raise the issue of corruption in the context of the Asian
economies is Gunnar Myrdal, a developmental economist. He identified corruption as one
of their main hindrances to economic growth. Since then, there have been many proposals
(Alatas 1990) to understand corruption: from the claims that it is a regrettable but an
inevitable phase in transitional economies (Huntington 1968), to claims about its positive
contributions to the growth of economies (Bayley 1966), from its important presence in
corporate culture (Randy and Shohat 2003) to its debilitating effect on society (Myrdal
1968). The problem with most literature about corruption, however, is the following: in the
last two decades or so theories of political corruption have become central (Hopkin 2002 &
Williams 2000) and the quest has been to find a suitable general theory about and better
ways to deal with political corruption (e.g. Collins 2004, Stapenhurst 1997 and Zainulbhai
2008). Unfortunately, this quest has pushed the broader intuition about the whole Indian
society appearing corrupt into the background. It describes the phenomenon narrowly as
political corruption, viz., the corruption of the public officials. Even here, the focus is on
explaining how corruption could take hold among the public officials (Tullock 1996) and
how corruption can be best eradicated (Quah 2002, Rose-Ackerman 1999). This focus does
not dovetail with the general intuition that corruption appears to be present everywhere in
the Indian society, as described above. The starting point for the proposed research will be
that these explanations - to put it boldly - are just about as adequate for our purposes as an
explanation of homicide is adequate to understand genocide (Chaudhuri 1960; Vittal 2000;
for a similar viewpoint concerning the existing research on corruption in general:
Lambsdorff 2007).
2. Definition of the problem and scientific hypothesis: There seems to be an important cultural
aspect to the phenomenon of corruption, but this has not been adequately described until
now. It seems to have something to do with the Western perception of non-Western
organisational cultures, or, with the impact of culture on organisational structures/cultures.
Research into the relation between organisational structures and culture in a systematic way
has first emerged in the field of management. Geert Hofstedes attempt to describe the
notion of culture in dimensions relevant to organisational structures (1980, 1991) has
generated a great deal of research in diverse areas: Management Control Systems (Birnberg
and Snodgrass 1988, Chow, Shields and Chan 1991), Managerial Accounting (Cooper 1994),
Human Resources (Budhwar and Khatri 2001), and their relation to culture as such.
Interesting and informative though such research is, it does not go much beyond the
insights formulated by Hofstede in the early days and does not make clear the relation
between culture and organisational structures. In the case of India (and other developing
countries in Asia, Africa and Latin America as well), this ignorance regarding the role of
culture in organisational structures goes together with a moralising discourse about the
functioning of indigenous organisations (Rademaker 2007). Indigenous Indian organisational
structures seem to be chaotic, non-transparent, inefficient, inert, and often corrupt (Hegge

2007, Lippens 2006, Nambiar 2002, Redding 1982, Singh 2007, Spenke and Goethals 2007,
Van Doren 2007, Verplancken 2007).
The proposed research will develop an alternative hypothesis which rejects this commonly
accepted understanding of organisational structures and corruption. It will start from the
assumption that Western organisational structures in India do not function efficiently
because the logic of the underlying native structures is different. Moreover, these native
organisational structures have hardly been studied, let alone understood. Because of this
general ignorance all Western development organisations and starting companies in India
struggle with the phenomenon of corruption: money disappears in bureaucratic offices or
through some invisible mechanism. The hypothesis will be built on the following insight:
indigenous Indian organisational structures exhibit three different aspects: (1) the formal,
explicit structure - decisions should be taken at this or that level (let us call this the nth level).
(2) An unwritten rule, which delegates the appropriate powers for the decision-making
processes upwards. Person X, who is officially in charge of the decision, tells you that it has
to go up. Thus, although the explicit organisational structure states that a decision requires
to be taken at the nth level, the unwritten rule lays down that it must be taken at the n+1st
or even n+2nd level. This is the mechanism that NGO-representatives, social workers,
educators and management specialists in India often note ironically. (3) The real-time
decision tree mostly exhibits just the opposite movement, namely a delegation of the
appropriate powers downwards. Person Y, who is positioned several levels below person X
finally takes the steps needed for the decision. In other words, on the one hand the Indian
organisational processes appear to be characterised by a transformation of executive
decisions into higher-level policy decisions, while on the other hand the informal, shadowy
aspect of the same organisational structures allows for the transformation of policy
decisions, (as much as possible,) into lower-level executive decisions. This means that (1)
although the formal organisational rule empowers the nth level hierarchy to take a particular
decision, (2) an unwritten, apparently super-bureaucratic rule forces the decision to go up,
(3) while an informal, shadowy rule says that much lower levels are entitled to make the
decision. It is this shadowy aspect which, in Western eyes, renders the Indian organisational
structures chaotic, opaque, inefficient, and, finally, corrupt. To Westerners, it feels (morally)
wrong to talk to one of the lower executives, build up relationships with them, and
convince them to help getting a decision through. As a consequence, the descriptions of
the Indian organisational structures often involve a moral judgement. The people working in
these structures are described in terms of value-laden categories like the patriarch, the
trusted servant, and so on. This research project will show that another way of looking at
the phenomenon is possible and also desirable. The following research questions will guide
the research: Why are organisational structures in India split into three aspects - the formal,
the upward delegation and the shadowy? What is the relationship of dependency between
these different aspects? Why does this structure cut across the public and the private nature

of organisations? Are we dealing with different kinds of phenomena that have been clubbed
together as corruption?

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