Laws of economics do not apply to us.

In an article Kaushik Basu, Chief Economist at the World Bank, and Avinash Dixit, Professor at Princeton University, point out that the government has no interest in controlling corruption. " Most agents who comprise government - politicians, bureaucrats, law enforcement officers - benefit from corruption," they write. Indeed the previous government even proposed to punish bribe givers as severely as bribe takers. There are two types of bribe givers, ordinary people are forced to pay bribes to obtain services to which they are entitled. These are harassment bribes. Business people pay non-harassment bribes to commit illegal acts, such as obtaining licenses cheaply, cheating on taxes or getting control of precious national resources. Basu and Dixit point out that when a business bribes officials," The winning firm profits, but the efforts and expenses of all the losers more than offset this gain. Worse, to the extent that corruption acts like a tax and therefore deters future investment, it hurts profits and growth for all business." Thus in a corrupt environment everyone loses. They propose that businessmen in India should set up an informal institution which everyone will be invited to join by promising not to indulge in corruption. This will investigate all allegations of corruption in business and punish the guilty. Perhaps Basu and Dixit are overlooking the fact that almost all businesses in India, except new ones, such Infosys and Flipcart, are family owned and were set up during the time described as the ' license-permit raj ' when foreign competition was strictly restricted, allowing Indian companies monopoly control of the Indian market. Children of the original founders are steeped in the same tradition of rent seeking and entitlement. That is why there is no research, no innovation and no international success. We have no companies like Apple, Google or SpaceX. Apple sold 74.5 million iPhones in the last quarter, its revenue was $74.6 billion, more than the GDP of Denmark, and its profit was $18 billion, more than the GDP of Costa Rica. A team of Indians has won a prize of $1 million from Google for building a moon rover and hopes to win the full prize of $30 million for designing a rocket. A US company contributed the prize money and the Wall Street Journal reported it. Will any of our 103 dollar billionaires dream of spending any of their money on such research? Did any of them support Sarita Devi by filing a criminal case for cheating against AIBA in Switzerland? Perish the thought. They will build huge mansions in India, buy luxury apartments in London or New York and buy luxury aircraft with which to travel from the luxury mansions to their luxury apartments. Since they have no ideas they must bribe to stay in control. Sell companies that default on debt and allow companies to fail. The crooks will disappear.