Is There Such A Thing As Good Corruption

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Is there such a thing as “good corruption”?  (Refer to an Asian case in your response.)

(see the link to Amin’s post above to motivate your response, but refer also to the assigned readings).

To answer the above question, please state the answer (yes or no) at the very first of paragraph, and writes about it’s following evidences. 

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Assignment Solution

No, the idea that corruption in a certain form or situation is “good” is entirely debatable. Proponents of “good corruption” such as Khan (1998, p. 16) and Kang (2003, p. 439) propose that in certain political settings, corruption lowers transaction costs and benefits certain major political or economic actors in developing countries which in turn accelerates the growth of the economy. Khan (1998, p. 20) cites historical evidence suggesting that developed countries also suffered from corruption in their initial stages of development, conveniently ignoring the fact that developed countries were never colonized and had been pioneers in modern scientific and rational thought. 

Khan (1998, p. 23) describes in great detail how corruption in developing countries could be viewed through the lens of a patron-client relationship or network. State officials and a privileged group of clients are seen as a part of such a relationship and the payoffs of their ‘transactions’ are calculated in terms of economic benefits. But such a model does not take into consideration other costs that crony capitalism exacts from developing countries in South Asia such as India or Pakistan. The ‘success’ of South East Asian countries is seen in conjunction with the high levels of “good” corruption prevalent in them (Khan, 1998). This kind of hypothetical correlation is not only unscientific (since it discounts the experiences of other developing countries in Latin America, Africa and South Asia), it also seeks to equate growth with development. How far can growth in GDP, FDI or Forex reserves translate into development for the poor, if it is only the rich that benefit from “good” corruption?

Transaction costs of corruption

Kang (2003, p. 440) envisages a mutual hostage situation between the elites wherein each party has an incentive in preserving the relationship for mutual benefit and protection. Like Khan, Kang too sees the transaction costs being lowered due to ‘good’ corruption. Interestingly, Amin (2010) discusses a recent study that posits the exact opposite of Khan and Kang’s assertions regarding the lowering of transaction costs. Amin (2010) describes how the study has found a correlation between bribery and increasing transaction costs – the time is taken to negotiate a bribe and the terms of the favour to be done. The bribe rate also increases with the number of rules and regulations to be bent (Amin, 2010). Thus, firms spending time and money on bribes would not benefit in the long term, as the bribe rate would increase so much, it no longer becomes feasible.


Although in recent years, India has emerged as a major player in international politics, its dismal human development indicators tell a different story. India also has its fair share of crony capitalism, manifesting in the form of kickbacks in large infrastructure projects. Yet, India’s growth and integration into the global economy have only worsened the already existing gap between the rich and the poor. If one is to give credence to Khan and Kang’s assertions, India ought to have benefitted from it. Khan (1998, p. 26) explains away India as an exception due to its peculiar caste, class, religious and ethnic diversity that precludes a strong patron-client relationship. Thus, good corruption is a convenient myth for justifying crony capitalism.

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