IIMB-WP N0. 516 WORKING PAPER NO: 516 Institutional Corruption: Few Issues Murali Patibandla Professor Corporate Strategy & Policy Indian Institute of Management Bangalore Bannerghatta Road, Bangalore – 5600 76 Ph: 080-26993039
[email protected] Year of Publication – May 2016 1 IIMB-WP N0. 516 Institutional Corruption: Few Issues Abstract: Institutional corruption is defined as an act by a public or a private agent that can be justifiable legally but still is corrupt. This arises out of missing institutions, laws and regulations. Furthermore, ability of powerful agents in influencing law making and implementing regulation can be a source of institutional corruption. This paper brings forth a few issues of institutional corruption and it presents qualitative empirics in the case of exploitation of non-renewable natural resources in the Indian context. Keywords: Illegal and Legal Corruption; Institutions; Exploitation of Non-renewable Natural Resources 2 IIMB-WP N0. 516 1. Introduction Corruption is generally defined as ‘misuse of public office for private gain’. Constitution of a country broadly defines rights and obligations of the public and the framework of the legislature in making laws and regulation and independent judiciary to interpret and enforce the constitution. When one says ‘broadly defined’, it implies certain degree of discretionary powers in the hands of the legislature and judiciary in making and enforcing laws. The degree of discretion could be a source of corruption in a country. On the other hand, missing institutions, laws and autonomous regulatory bodies can be a source of corruption. An example is the absence of autonomous regulatory bodies in regulating exploitation of non-renewable resources.