(a) The current society is plagued with widespread trust-deficit. What are the consequences of this situation for personal well-being and for societal well-being? What can you do at the personal level to make yourself trustworthy? (b) It is often said that poverty leads to corruption. However, there is no dearth of instances where affluent and powerful people indulge in corruption in a big way. What are the basic causes of corruption among people? Support your answer with examples.
Subtopic: Probity & Governance · trust deficit and roots of corruption
How to structure your answer
Detailed model answer
211 words · target 150 words · 20 min
(a) Consequences of a trust deficit and becoming trustworthy
Trust is the social capital that lowers the cost of every transaction. Its erosion has costs at both levels. For personal well-being: chronic suspicion breeds anxiety, isolation and weaker relationships. For societal well-being: it raises transaction costs, encourages defensive contracts and litigation, weakens cooperation on public goods (tax compliance, civic rules), and corrodes institutions, low trust in vaccines or police undermines health and safety. To make myself trustworthy I would practise consistency between word and deed, keep commitments, be transparent about motives, admit mistakes, and show competence and benevolence, since trust rests on both ability and goodwill.
(b) Basic causes of corruption
Corruption is not merely a function of poverty; the affluent are often the biggest offenders, showing that greed, not only need, drives it. Basic causes include: greed and unlimited wants beyond need; weak deterrence and low probability of punishment; monopoly plus discretion minus accountability (Klitgaard's formula); erosion of values and normalisation of rule-bending; opacity and complex procedures that create rent-seeking; and political-corporate collusion. The 2G, coal-block and bank-fraud cases (Nirav Modi, Vijay Mallya) involved wealthy, powerful actors, while petty bribery for basic services reflects the compulsions of the poor.
Rebuilding trust and curbing corruption therefore requires both institutional reform and individual value-building.
What an examiner expects to see
- Trust is social capital that reduces transaction costs; its deficit is both a personal and a systemic cost.
- Personal consequences: anxiety, isolation, weaker relationships, defensive behaviour.
- Societal consequences: higher transaction/litigation costs, weak cooperation on public goods, institutional decay, poor tax and rule compliance.
- Trustworthiness = competence (ability) + benevolence (goodwill) + integrity (consistency), demonstrated over time.
- Corruption is driven by greed, not only need, the affluent are frequent, large-scale offenders.
- Klitgaard: Corruption = Monopoly + Discretion − Accountability; add greed, weak deterrence, opacity, value erosion.
- Cure needs both institutional reform (transparency, deterrence) and individual character-building.
Concrete cases, schemes and judgments
- Robert Klitgaard's corruption formula (Monopoly + Discretion − Accountability).
- 2G spectrum and Coal-block allocation cases, elite, large-scale corruption.
- Nirav Modi (PNB fraud) and Vijay Mallya, affluent offenders, disproving 'poverty causes corruption'.
- Petty bribery for ration/certificates, corruption of compulsion among the poor.
- Francis Fukuyama, 'Trust: The Social Virtues', on trust as economic capital.