Corruption by the book

Since I also work in education, I get to hear some real horror stories.

Do you know how the textbook purchasing routine usually goes in schools? Many school boards in India don’t mandate that you should buy a particular book; they mandate a particular syllabus, and schools are free to decide which books to buy, so long as they cover the syllabus. So in October-November each year, the textbook salesmen come calling. And (small wonder) when a school decides to pick a particular publisher, they get a cut of 30%  on the sales that are made to the school’s students.

Now, there’s no denying that a large number of schools are honest and their integrity is beyond reproach; however, the mere existence of such an incentive is potentially corrupting. And in India, where we are so inured to corruption that we ascribe every decision to it while not doing anything about it, the first reaction I get when I share this information with friends is, “What did you expect? — I’m not surprised”.

I was thinking about this factoid when I read about the Vadra-DLF deal that everyone was talking about a couple of weeks back. DLF’s rationale was perfectly acceptable from a legal perspective: the deal was one between two private entities, with no public money involved, and so the law has no jurisdiction to probe unless the Government was specifically defrauded. I agree. If anyone has a right to complain, it is the share-holders and debt-holders of DLF, who may ask why the company gave an interest-free loan to an individual instead of deploying the capital more effectively. And DLF can reply, with perfect legitimacy, that they gave this loan because they expected that this person, being closely related to other, powerful people, would be able to use his goodwill to bring intangible benefit to the company. So it was a good investment. And no one was defrauded.

The schools that textbook publishers pay off could argue likewise. They could say, we choose the best textbooks regardless of the incentives we get. And when we get an incentive, it does not go into our private purses, but into the school’s coffers. This serves to reduce the amount of money we need to recover from parents, keeping fees lower. Perhaps we are guilty of under-reporting this income while filing our taxes, but otherwise, there is no wrong-doing.

In my opinion, though, there is wrong-doing, if not in fact, then at least in principle. And there is corruption – if not in the people, then in the system, but corruption it is, nonetheless, even if it is not a particular individual who is benefiting from it.

When all institutions are created, they have a particular vision and a ‘business plan’. The ‘plan’ for a school is that it will take in students, provide them with the best education possible, and recover the cost of doing this by levying fees upon the beneficiaries, viz. the students (and their parents). If the parents feel that the school does not provide value for money in its education, they have the right to withdraw their wards from the school. If there is a broad tendency among parents to value quality in education, the schools that provide better education are likely to be more successful; if there is a broad tendency to value low-price in education, the schools ‘race to the bottom’; either way, the choice is the parents’ (and more broadly, society’s).

There are other schools that are run without a commercial motive; the ‘convent school’ is one example, where it is funded by a religious organization to provide subsidized education to children. However, in this case too, there is a broad understanding between the parents and the school – the understanding that, in exchange for providing the children education, the school also has the right to educate them about the school’s religion of choice, with the aim of increasing the religion’s influence in public life. And the school is funded by people who think that increasing the religion’s influence in public life is a good thing and a moral necessity.

The point is that these ‘social contracts’ are corrupted by the textbook publisher who offers a kickback to the school. I can imagine the case of two schools, one very good and the other rather mediocre. The bad school charges less than the good school, as it should; and because there is a segment of the population that wants low-cost instead of high-quality, both schools have an equilibrium level of students.

Now, however, supposing the bad school partners with a publisher to provide bad books to the students, but due to the publisher’s kickback, reduces fees even further (or perhaps even eliminates fees, so that parents ‘pay’ the school by buying schoolbooks instead). The contract is broken now — the parent expects the school to provide the best possible education for the fees they charge, but in this case, the school deliberately provides a poor education because of its desire to reduce fees.

The enemy of corruption, then, is to strive for quality. In every social contract — between the school and the parent, between the voter and the politician, between the shopkeeper and his customer — there is an underlying axiom – that the existence of the contract, the existence of the system, is for the ‘greater good’. The understanding is that an institution like a school or a Parliament, though strictly speaking an unnecessary system for human existence, nonetheless makes us a better society by being present.

Corruption is not just when an oily politician makes a kickback on a defence deal. Corruption is any instance when a social contract, which existed to make things better, is subverted to make things worse.

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