Corruption is arguably the dominant public policy issue being debated in India today. The popular lament is about an alarming increase in corruption. The graphic below highlights a part-philosophical, part-economics explanation.
The dynamics of philosophy and economics have combined to mis-align incentives badly to favor those seeking rents. The returns from rent-seeking have surged, whereas the risk of getting caught has come down. Therefore, naturally, the rate of return, per unit of risk assumed, has exploded. Further, the self-respect quotient among public officials has declined precipitously (partly because the strong stigma associated with rent-seeking has long since disappeared and also since rent-seeking has got closer to the norm). So is there any surprise at the dramatic increase in corruption?