Liberalization and Corruption: Resolving the Paradox (A Discussion Based on South Indian Material)

Abstract

Summary Theoretical treatments of corruption in the new political economy place bureaucrats who control public sector goods centre stage. Corrupt behaviour then involves the creation of new private property rights over such goods, and deregulation and privatization will then destroy the preconditions for corruption. Here, empirical material from South India is used in a political economy framework to show how such theories represent an arbitrary and highly ideologically filtered subset of relations of corruption. Alternatives are described in which the process of accumulation through market exchange, rather than the rent seeking of the bureaucrat, is centre stage. Further, under conditions where the purposes of corruption are not merely private bureaucratic gain but also bidding for political power, then the predictions of new political economy can be up?ended and corruption can be seen to increase consequent to deregulation.