India’s middlemen: connecting by corrupting?

Much of India’s corruption involves middlemen: go-betweens who bring citizens’ cases to the attention of state officials, producing results – for a price. Citizens pay bribes, often for benefits for which they already qualify, and much (but not all) of that money is passed on to officials by the middleman. On its face such arrangements would seem to benefit no one but the middleman himself, but closer examination shows that middleman corruption involves much more than a discrete material transaction. There are important intangible dimensions: officials’ status is reaffirmed, while for citizens government takes on a comprehensible human face. These dimensions of corruption become all the more important over time, for both reputational capital and expectations are built up that shape future transactions. Most important, middlemen reduce transaction costs for citizens and officials alike. Thus, while middleman corruption falls far short of the ideal sorts of market, government and personal systems of “micro-coordination” assumed in many accounts of the effects of corruption, it may well be a better way of getting things done than most of the alternatives actually available. The analysis yields a more subtle but precise view of how cultural factors – especially mediating social institutions – figure into the study of corruption, and may suggest reasons why extensive corruption and solid economic growth have coexisted in India for decades.