Corruption Case Study

I heard this story recently. Not sure if it is true. Read and draw your own conclusions.

The Supreme Court has banned iron ore mining in Karnataka’s Bellary region. A government-owned organisation is allowed to do the mining. The result: steel company barons are rushing to the appropriate Central minister with generous dollops of cash to get their quotas of iron ore allocated for their plants. With elections due in states next year, all money is welcome.

And to top it off, iron ore mine owners in other states are readying cash to lobby to ensure that the Court does not lift the ban so that they can get above normal profits!

Lokpal ,anyone? Think about what’s happening. The problem, like I wrote last week, is Monopoly+Discretion-Accountability=Corruption. And no additional institutions are going to solve either this corruption or the corruption that happens when you jump a red light and are offered a choice – pay Rs 50 and get going now, or spend a few hours in court and pay more if a challan is made.

Unless we understand the cause of the problem, we are not going to get to the right solution, and could in fact make the problem worse.