Policy Watch: The language of money

'Money makes the world go around/the world go around'.  These lyrics from the memorable musical Cabaret apply to governments and the mafia as well. In fact, talking about the Mafiosi, there is one question that always fascinates policy watchers — what is the difference between a government and a mafia?

On closer examination, the answer is a cynical “None”.  Both the government and the mafia collect protection money. There is one difference though — the government calls it taxes. But both profess to protect their respective constituencies.

There is another difference. The government is expected by law to be accountable to its constituency; the mafia is not. In reality though, in poorly-governed countries, the mafia turns out to be more accountable (“there is honour among thieves”) than governments. How else does one explain the shameless acquisition of plots, houses, junkets and even graft by elected representatives? This is true of bureaucrats, policemen,  and jurists as well. All of them represent governments. Such incidents have been pointed to in various sections of the media. One would have thought that the harsh media exposure should have provided them enough cause for shame. On the contrary, you see brazenness at, even defiance of, all norms of what is considered decent behaviour.

Like governments, the mafia too collects protection money. But, unlike bad governments,  it is honour-bound to protect those from whom it has taken the money. As a result, when a girl is under threat of molestation in a slum, her father would prefer to go to the local slumlord and request him to protect his daughter, than approach the police station. The mafia earns this respect because it actually protects its constituency — using both legal and extra- legal methods. Not surprisingly, when this slumlord stands for elections, his constituency will vote for him, irrespective of how many police cases the state may have filed against him. For the slum-dwellers, he is the protector, not the police, not even the government. But, sadly, if the slumlord does get elected, there will soon be a new contender for ‘slumlord-ship’ in the same constituency. Obviously, the contender will have to demonstrate that he can be trusted much more than the government, which now has the former slumlord as one of its representatives.

If the ‘good’ old slumlord who got elected also gets tarnished by the smear of bad governance, shouldn’t it be time for us to sit back and ask: why does a ‘good’ slumlord become ineffective and tainted once he becomes part of the government? Is there something in the government that allows people to become protectors while they are not in government, but get transformed into oppressors when they become part of the government?

A closer examination shows that the root cause for the emergence of extra-legal protectors outside the government is the inability of the state to protect common folk. This is because it has allowed the privileged to slow down the wheels of the law-and-judiciary machinery. The privileged create rules that clog the machinery. Transfers, endless adjournments, poorly drafted charge sheets and laws, and not appointing enough law officers are some of the usual techniques adopted by such privileged people. The privileged include politicians, the wealthy, and the powerful (journalists, bureaucrats and corrupt policemen and judges as well). And as any sociologist will tell you, any delay in the dispensation of justice is more power to the oppressor.  Judicial delay is the conman’s friend.

Had the police and the judiciary worked well, with checks and balances, subject to investigation and compensation spurred by public complaints (though through a mechanism that prevents frivolous or motivated complaints), common crimes could be settled within say a week or a fortnight. Had this happened, common people would not need to approach a slumlord.

The failure of the judiciary to pull up the police or legislators for delays, or slipshod investigations, has contributed to this problem.  The inability of the judiciary to weed out the corrupt in its own ranks, quickly and expeditiously, has also added to the scales being tipped in favour of slumlords emerging as protectors. Effective judicial speed is the lynchpin on which economic growth swings and progresses. It is the ultimate bulwark that civilised societies have against any kind of mafia, any type of exploitation.

This situation can be ameliorated if the judiciary has enough people as judges and support staff.  The country could have been called well-governed if its judges were paid better than the seniormost banker, so that the profession could attract the best talent.  You cannot expect a second rate intelligence to sit in judgement over the best brains that make crime possible.

Obviously, unless you pay the judges, the bureaucrats and the police well enough to be able to attract good talent as effectively as do the best of banks or companies, you cannot improve the law-enforcement and judicial system.

Yes, India has learnt to collect money. Unlike the past when the percentage of tax-to-GDP was in single digit numbers, India today boasts of a 17% benchmark (see table). Its ratios are better than most of the neighbouring countries, even a notch better than China. But in its ability to dispense justice, it lags terribly.

India needs to increase the number of judges at least four times, at all levels, in order to strengthen its judicial supervision.  This also means that it will need four times the number of courtrooms as well. If it has to pay its judges three times more than what they get today, it also means pushing up the judicial bill by at least 24 times. But this pays for itself very quickly. Faster effective adjudication results in the wheels of commerce getting unclogged, and more business means more investments.  That means more jobs and hence more taxes.

But many powerful people may squirm at this prospect. But without it, progress will become extremely difficult.

Moral: Collecting more money is not enough.  The mafia does it well. To be a good government justice needs to move faster. And effectively. 

The author is a consulting editor with dna