I tried posting a comment with the newspaper but it wasn't a success. Here it is.
I like the approach to the problem. But I do have a few differences with what you say.
Tatkal service in the Railways has surely brought in larger revenues but hasn't brought down the corruption in railway reservations. I think rent-seeking behaviour may not change in the light of introducing premium public services. Rent-seekers find different avenues.
While faster public service/facilities at a premium might succeed and earn revenues to the government, there must also be a mechanism installed to ensure that the common man (read, one who doesn't pay a premium) also can get the same service within a stipulated time (with built-in penalties when a service isn't provided on time).
Typically the rent seeking market is sustained by the presence of individuals who are willing to pay. In the absence of a mechanism to indentify them from the common citizens, every one ends up getting harassed.
I strongly believe rent seeking occurs because there are incentives that promote it, and no amount of regulation can control the same. Our challenge is to eliminate or atleast contain, those incentives, wherever possible. A single price structure surely does not take into account the differential needs (and utilities) of citizens and varying willingness to pay, which is the primary reason for the incentive distortion. Price discrimination takes care of all demand side (citizen side) corruption impulses, while also partially addressing supply side (official side) ones.
The issue of ensuring that common citizens get the same service within the Citizen Charter stipulated time, is a different one. In fact, Citizen Charter provides for built in provisions of penalties on the errant individual employee and payment of that amount as compensation to the citizen. It is an issue of enforcement of an existing regulation. And I believe there are no short cuts to that, except strict monitoring.
For example, though there exists a Citizen Charter in all civic bodies with built-in penal provisions, it is rarely implemented or enforced. Its implementation gets lost in the numerous other "priority" items of work. For the past six months, we at the VMC have paid some attention and effort in enforcing its provisions, with significant success. But the challenge is to sustain the focus, which is difficult given the strong and entrenched vested interests, and the huge workload and competing priorities.
But this does not in any way detract from the fact that we should spare no efforts to eliminate all distortions in incentives that promote rent seeking. And uniform pricing that fails to take into account differential needs of citizens, is a very powerful source of distortion of incentives!
2 comments:
I tried posting a comment with the newspaper but it wasn't a success. Here it is.
I like the approach to the problem. But I do have a few differences with what you say.
Tatkal service in the Railways has surely brought in larger revenues but hasn't brought down the corruption in railway reservations. I think rent-seeking behaviour may not change in the light of introducing premium public services. Rent-seekers find different avenues.
While faster public service/facilities at a premium might succeed and earn revenues to the government, there must also be a mechanism installed to ensure that the common man (read, one who doesn't pay a premium) also can get the same service within a stipulated time (with built-in penalties when a service isn't provided on time).
Typically the rent seeking market is sustained by the presence of individuals who are willing to pay. In the absence of a mechanism to indentify them from the common citizens, every one ends up getting harassed.
I strongly believe rent seeking occurs because there are incentives that promote it, and no amount of regulation can control the same. Our challenge is to eliminate or atleast contain, those incentives, wherever possible. A single price structure surely does not take into account the differential needs (and utilities) of citizens and varying willingness to pay, which is the primary reason for the incentive distortion. Price discrimination takes care of all demand side (citizen side) corruption impulses, while also partially addressing supply side (official side) ones.
The issue of ensuring that common citizens get the same service within the Citizen Charter stipulated time, is a different one. In fact, Citizen Charter provides for built in provisions of penalties on the errant individual employee and payment of that amount as compensation to the citizen. It is an issue of enforcement of an existing regulation. And I believe there are no short cuts to that, except strict monitoring.
For example, though there exists a Citizen Charter in all civic bodies with built-in penal provisions, it is rarely implemented or enforced. Its implementation gets lost in the numerous other "priority" items of work. For the past six months, we at the VMC have paid some attention and effort in enforcing its provisions, with significant success. But the challenge is to sustain the focus, which is difficult given the strong and entrenched vested interests, and the huge workload and competing priorities.
But this does not in any way detract from the fact that we should spare no efforts to eliminate all distortions in incentives that promote rent seeking. And uniform pricing that fails to take into account differential needs of citizens, is a very powerful source of distortion of incentives!
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