Transparency International ranks Vietnam 116th out of 178 in corruption perception. In comparison, the Four Asian Tigers Singapore, South Korea, Taiwan, and Hong Kong rank 1st, 39th, 33rd, and 13th, respectively. The United States ranks 22nd. If Vietnam wants to become the fifth tiger, they clearly have to close the huge corruption gap. How? Kaushik Basu, chief economic adviser to India’s Ministry of Finance, has the answer.
To reduce corruption, make paying bribes legal. Taking bribes would still be illegal. If caught, the person taking the bribe would have to return the money and face additional penalties, like going to prison.
It’s a brilliant game of incentives. Here’s an example of how it would work (borrowing from NPR’s article):
You want to remodel your house in Saigon, but the government clerk says you won’t get a permit unless you offer him a bribe. You pay the clerk. Normally, you are now both criminals. However, under the new law, what you’ve done is completely legal. Further more, you can go to the police, report that you paid the clerk a bribe, and the clerk would have to return the money to you (and go to prison).
See what happened there? If you were the clerk, it would be much more dangerous for you to take the bribe under the new law. With the old law, both of you are partners in crime, so both have the incentive to keep quiet. With the new law, you and the clerk have completely opposite incentives. He wants to keep quiet, while you want to tell the police and get your money back.
Of course, it’s not perfect. As NPR suggests, this could lead to an increase of false accusations and it would only apply when the party paying the bribe is legally entitled to receive what they’re paying for.
Do you think this can work in Vietnam? What are potential problems? Let us know in the comments.
Source: NPR, Why Paying Bribes Should Be Legal
Image from Creative Commons