Avinash Dixit, John J. F. Sherrerd ’52 University Professor of Economics at Princeton University is a pioneer of game theory, and a major influence behind the Nobel Laureate Paul Krugman’s acclaimed work on International trade. Dixit was one of the speakers at the recently concluded Delhi Economics Conclave.
In a conversation with Shanu Athiparambath, he spoke on the importance of collective action and social ostracism in fighting corruption. Excerpts:
Q. You said that people themselves should take initiative instead of waiting for the Maa Baap Sarkar to do something about corruption. But, when a government official asks me a bribe, isn’t it true that I am better off if I simply pay the bribe?
A. Exactly. Individuals cannot fight corruption. But, the Indian business community can do something about it. If no one is going to give a bribe, what is the government official going to do? You need collective action, and the businessmen who refuse to co-operate should face the threat of ostracism. They have to know that if your fellow businessmen find out, you will be out of business. The cost of being found out is much bigger than the benefit from a single contract.