Solutions to Problems

20140721-005109-3069121.jpgA few days ago, I was in Delhi to understand the processes and operation of Integrity Pact in Steel Authority of India (SAIL). Integrity Pact (IP, for short) is an interesting idea developed by Transparency International It is a voluntarily made agreement binding the signing parties to non-corrupt tender practices during the period of bidding upto a year beyond the last payment in the tendered project. SAIL has operationalised this process since 2007, annually covering around 75% of their tenders in terms of value of contract. Meaning that 75% of their total cost in procurement is covered by Integrity Pacts between SAIL and the bidders.

The positivity I saw regarding this vigilance mechanism, in the officials of SAIL as well as during my interaction with one of their Independent External Monitors’, who is a retired senior govt officer, with a rich experience in government and a sterling reputation on integrity, was interesting. Why would a mere declaration of honest conduct by two parties in a commercial contract be effective?

Thaler and Sunstein’s book, ‘Nudge’, argues for using behavioral influences for reorienting economic and other behaviour of people. And since reading the book, I’ve been looking for evidence of these ideas in Indian policy making. This IP idea being used in Indian public sector tenders is such a one. It is designed to align behavior in commercial dealings towards more honest and fairer practices. It appears to have a focus on ‘pre-crime’ or dealing with a situation before it gets out of hand, and the mechanism is held in place through the possibility of a universally trusted third party enquiry on complaints of transgressions.

Behavioral nudging towards lofty objectives like clean public procurement, can however be a non starter if operationalised only as a formality, without the required seriousness by govt agencies. So positioning the right people for vigilance jobs continues to be a priority. But ideas like the IP can make both beneficiaries and governments, walk the straight path by making corruption more risky. Such measures improve society’s score on voluntary compliance with rules and creates a fairer public environment for everybody over time.

We need such ‘nudges’ in traffic management, crime management, police station responsiveness to the community and so many other areas of policing, in order to intelligently handle the increasing workload on police in this country. It is repeatedly mentioned that we have as good laws as any country could want but we very seriously lack good enforcement. Creating policies effecting better public behavior is a likely golden mean to achieve better enforcement. Maybe, it is time for the bright economists and psychologists of this country to challenge themselves on these issues and for the service givers to effectively use them.


2 thoughts on “Solutions to Problems

  1. Automatic registration of FIR and consequent processing under criminal justice system does not allow police sufficient discretion to nudge rather than enforce, although in practice police officers often use nudging in case of minor offences, especially when maintenance of order is the prime requirement rather than enforcement of laws.


  2. This is an interesting discussion. Here is an extract from some recent research.

    Simply by signing documents at the start rather than end, people might be encouraged to behave more honestly.
    The effect was demonstrated in a series of staged and real-world experiments, which included moving signature lines from bottom to top on car insurance reports.

    On average, that small tweak resulted in a 2,400-mile difference in mileage claimed on new policy forms, hinting at what’s possible with just a slight nudge to be ethical.

    “Many people want to be good. Most people care about being good. But they need a reminder to help them sometimes,” said Lisa Shu, a Northwestern University psychologist and lead author of the new study, published August 27 in Proceedings of the National Academy of Sciences.

    Other research suggests that signing one’s name — not merely printing it, but inscribing your unique, personal autograph — acts, in the words of University of Alberta psychologists Keri Kettle and Gerald Haubl, as “a general self-identity prime.” It reminds you of who you are and want to be. As a result, you live up to your ideals, at least for a little while.

    More at

    To me, the Integrity Pact is the organisational signature in the beginning. Where other sufficiency conditions exist, it will certainly help.

    The bane of Indian public sector has been the excessive government control on the boards, which hardly fucntion the way private sector boards function. The members of such boards do not possess the independent mindset required to discharge the governance function.


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