Lina Vyas and Alfred M. Wu say that while both nations have much to teach other developing countries, India’s approach of fighting corruption through redistribution has the advantage of reducing income inequality and boosting the purchasing power of the poor
Can corruption be curbed in developing countries? What lessons can other countries learn from China and India’s experiences? Observing the public trust generated by the anti-graft drives of President Xi Jinping and Prime Minister Narendra Modi, combating corruption has become a signature “clean government” drive across the developing world.
A large number of senior public officials have been investigated in China as a result of the campaign to root out corrupt “tigers” and a huge amount of corrupt money has returned to the banking system under Modi’s demonetisation in India. Though the Chinese campaign has been more striking and visible around the world, Modi’s “Robin Hood” style of tackling corruption should be accorded attention as it combines redistributive politics with anti-corruption efforts.
Xi and Modi met recently in Wuhan to strengthen ties and, hopefully, end long-term distrust and disputes. Better relations between India and China can only be positive for the two largest developing economies. Corruption has been the most prominent internal challenge facing the two countries for decades. If they can learn from each other’s experiences, it would provide valuable lessons for anti-corruption efforts around the world.
As redistributive politics gain importance in China, with the substantial widening of the wealth gap, in future, the Chinese leadership should consider an anti-corruption drive that reduces these disparities and improves the purchasing power of the poor.
China and India’s anti-corruption efforts have aroused the interest of domestic and international observers, who seek to learn from the relative successes and failures. China’s campaign to target both “tigers and flies” and India’s demonetisation have been impressive and have resonated throughout the developing world. Considering the size and populations of the two countries, deep-rooted corruption is not easy to take on.
Policy changes and reform face vast amounts of red tape and resentment from opposition groups in India, while hurdles in China include bureaucracy and disagreement at every level of government. China is constrained by its authoritarian nature, meaning there is no downward accountability. In India, it is party politics, with party heavyweights left checked and Modi’s anti-corruption policy supported by regional governments run by the ruling party and sabotaged by states not under its control.
China’s ranking in Transparency International’s Corruption Perceptions Index stands at 77 and India’s is 81, out of 180 countries. This suggests corruption remains a serious challenge for both.
Xi seems very determined, vowing to crack down on corrupt high-ranking officials and rank-and-file civil servants. Official sources in China say his regime has investigated and jailed hundreds of senior leaders, including ministers, generals, provincial leaders and bosses of important state-owned enterprises. The Central Commission for Discipline Inspection (CCDI) of China’s Communist Party has been a formidable anti-corruption agency with wide powers to investigate cases and detain suspects without warrants.
Earlier this year, with the revision of the Chinese Constitution, a “super” anti-graft agency – merging the CCDI with a number of anti-corruption organisations – has been introduced. This may be good for anti-corruption efforts, but some human rights observers worry about the new agency’s unchecked extensive power. It is clear that the Chinese government would like to promote accountability within the bureaucracy, fighting corruption by strengthening the organisational capacity of the agency instead of empowering the public. Nevertheless, the eradication of corruption through internal public-sector mechanisms seems fragile, and may be ineffective.
In India, corruption can generally be said to be part of the daily working culture. The Indian government has taken significant steps to tackle the issue, but given the size of the country, the enormous distribution of power and large population, the achievements have so far been minimal.
Thus, the government has been compelled to use strategies that can penetrate society swiftly and deeply, to assure the campaign’s long-term benefits. Despite some issues over a lack of transparency and disruption to ordinary people’s lives, Modi’s implementation of demonetisation has benefited economic development and also public governance in India.
In a recent study, Sasidaran Gopalan and Ramkishen S. Rajanout argue that, “As undemocratic as the demonetisation exercise might appear, given Prime Minister Modi’s performance to date, the people of India have clearly given him the benefit of the doubt”.
First, as Modi claimed, demonetisation has enriched the poor by invalidating corrupt money. Therefore, it has served as a kind of redistributive tool. Second, demonetisation can stop corrupt behaviour by cutting off the time-worn channels for officials to launder their money.
The central governments of the two countries have featured strongly in these anti-corruption policies. While Xi and Modi both have personal interests in strengthening their power, the two have also shown a determination to free their nations from the scourge that has plagued their nations for decades.
Modi is seeking another term and has one eye on the 2019 general election. Xi is now in his second term and with the abolition of presidential term limits, can stay on longer. This will help create a strong, stable leadership for combating corruption. So, it is clear that both these anti-corruption campaigns have merit for other developing countries’ efforts to clean up government.
India’s efforts in particular to increase the purchasing power of the poor and reduce income disparity is a bold new approach, and others would do well to take note as they seek to handle this global challenge.
Lina Vyas, PhD, is an assistant professor in the Department of Asian and Policy Studies at the Education University of Hong Kong. Alfred M. Wu, PhD, is an associate professor at the Lee Kuan Yew School of Public Policy, National University of Singapore
This article was first published in SCMP on 7 May 2018.