The Municipal Corporations are concerned with delivery of a variety of civic services to citizens - building plan approvals, birth and death registrations, tax assessments, property title transfers, water and sewerage connections etc. Though the Citizen's Charter has specified fixed time schedules for the delivery of these services, it is followed more in its breach than observance. It is normal practice for citizens to be harassed by making them run around the respective offices for these services. The more resourceful individuals however manage to get their work expedited by bribing the officials. This arrangement suits the rent-seeking establishment as well as those willing to pay the additional rent for these services.
My prescription to solve this problem is to formalise and then institutionalize this rent-seeking. How do we do that? The Municipal Corporation needs to put in place a mechanism for identifying all those who would be willing to part with this additional charge (which they pay by way of rents) for receiving these services. One way is to enlist certain high value citizens who need regular interface with the Corporation, as premium customers of the Corporation, on payment of a fixed yearly subscription amount. May be the Corporation can issue an "Edge Card" to these premium cusotmers, which will enable all members to access VMC services through a fast-track mechanism. The subscription amount should be decided by the market populated by such high value customers.
Another option is to have differential pricing for these services. Those who are ready to wait and get these services delivered within the time period specified in the Citizen Charter will continue to pay the normal fees. But those who require the services urgently can be charged certain amount, depending on how quickly they need it. Indeed we can even have across the counter delivery of most services, with all the verification and scrutiny done in an hour or so, but at a high premium. I am sure it is a premium those in need will readily pay for.
The solution is an economically efficient one, in fact it is a Pareto optimal one. Many citizens are in any case accessing and getting their work done through back-door and informal channels. The cost of the services delivered by this route went towards enriching individual officials as a form of speed money, without any way benefitting the Corporation. This payment of speed money generated an unhealthy environment within the Corporation, wherein all the citizens were harassed in expectation of some illegal gratification. There was no way for the official expecting the rent to differentiate between those who were willing and capable of paying and those who were not. In the end, both categories ended up harassed. Now the Corporation would be able to capture the cost of the services, and even develop a market in such services. The "Edge Card" may also emerge as a sort of status symbol for its holders, and may help attracting a significant number of the rich and wealthy of the City. In fact, it can even become an effective instrument in channelizing philanthropic efforts towards the city's development.
Suppose A and B apply for a building plan, under normal circumstances both plans have to go through the same scrutiny and approval process. The process does not account for the premium attached by any of the applicants in getting the plan cleared at the earliest. If A urgently needs the plan and is willing to pay additional fees to expedite its approval, then the existing process does not take into account this willingness to pay. An economically efficient market in municipal services will calibrate price of services against demand, so as to minimize any deadweight losses. Differential pricing for services will enable A to get his Plan approved earlier than B, but for a cost which A is willing to bear. B will in any case get his Plan approved within the statutorily mandated time period. This arrangement is a Pareto optimum when compared to the previous one-price-for-all system, since we are now making both A and the Corporation better off, while B is no worse off.
What is the flip side to this arrangement? Critics may say that it is pandering to elitism in delivery of even basic civic services. My counter would be that it would only be formalising an existing arrangement, which cannot be wished away nor can be controlled beyond a point, without in any way affecting the mandated schedule of delivering services. It would make a significant dent on rent-seeking behaviour, in fact even questioning the very need for such payments. It would also bring in much greater transparency to the delivery of such services. For the moralists among us, the downside by way of commercializing even basic government services, is more than counteracted by the upside in containing corrupton which was eating away the fabric of our society.
I have tried to address only a certain category of corruption in this post. Economics as they say is the study of how "agents respond to incentives". By that yardstick alone corruption is an interesting field for application of economic principles.
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