Archive for December 15th, 2008

Discovering Kerala and AyurVAID:

December 15, 2008

In this short video I share some of my first impressions of Kochi, my new hometown, and AyurVAID:, the organization I am working with. Thank you to everyone at AyurVAID: for making these first thirty days in India a great experience.

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On Corruption Part-I

December 15, 2008

One fall evening in New York City, a small group of Acumen 2009 fellows got together at a small restaurant called the Istanbul Grill. The conversation quickly turned controversial (ice cold beers loosened our tongues) as the group discussed the multi-layered issue of corruption. Here is a brief recap for you.

Our class is composed of people from different parts of the world and we started off by contrasting the prevalence of corruption from the point of view of a common man. In India and Pakistan, corruption exists in all strata of society and is in your face. However in the US, one often hears about corruption only in high office or at very senior levels in corporations. An average American can live his life without actually ever offering someone a bribe.

Some of the fellows opined that bribery in India was a kind of efficiency tax and that most enterprises had factored this into their cost of operations. Others stated that bribes, regardless of scale, were immoral and should not be tolerated.

Things got interesting when we discussed gray areas. Let’s say, your company in India, frequently imports and exports raw materials and finished goods. To navigate the maze of export/import regulations and to save time, most companies hire clearing and forwarding agents. These agents charge a fee for handling paperwork, customs etc in order to get your product through the docks. The transaction is straightforward and your company gets a receipt. Your company’s accountant is happy because there is a receipt/invoice and this expense will pass an external auditor’s review. Everything is okay and life goes on, except for one little detail that gnaws at your conscience. You know that containers don’t slide through shipping docks without a little lubrication. Did you just outsource the dirty act of bribery to an agent? Hmmmm. Technically, you didn’t. You paid a fee and received a service. The agent can do anything he wants with the money. It’s not your problem. You saved time and were productive in some other part of your business.

You can argue that these things happen only in the developing world where there are millions of agents that help you deal with bureaucratic governments. Well, from a moral standpoint, how is this different from a salesperson that wines and dines clients on an expense account, just to win a contract? Yes, there are policies to limit the expenses, but why support such a corrupt policy in the first place? Why do companies on the FORTUNE 100 list pay loads of money to lobbyists (aka agents) who then take politicians on junkets and golfing weekends?

I believe that most people are part of a silent majority that participates in these institutionalized forms of corruption. Since the corrupt act is outsourced and once removed from us, we convince ourselves that our behavior is moral. However, morality, often quantified and viewed as an absolute, seems to be a trait that should be measured on a sliding scale.

A fascinating article by Marianne Betrand and Sendhil Mullainadhan reignited my memory of our discussion and forced me to write my first blog entry!