Growing up in Bangalore, India, Sarv Devaraj often took the train with his family to visit relatives or go on vacation. Many a time when they bought reservations in advance though, they could never be sure of actually getting the seats they had paid for. Train conductors would often ignore the printed ticket, instead assigning the best seats to whoever paid a bribe.
“You would show up, and somebody would be sitting in your seat,” Devaraj remembered with a laugh. “It was always uncertain whether you would get the seat assigned to you, or whether you would even travel or not.”
Today, India’s railways use a computerized reservation system, ensuring that passengers will actually get the seat they paid for and virtually eradicating the practice of bribery. That’s just one example of how technological innovation can reduce corruption, Devaraj said. Now the Fred V. Duda Professor of Business at the Mendoza College of Business, Devaraj’s current research on corruption was inspired by his experiences in India.
“It’s something very personal to me, because I had numerous incidents in which either I or a close friend or family member was affected by corruption, be it in terms of an educational goal, or whether it was in a hospital, where they were not given the treatment that they should have had,” Devaraj said. “So it really pains me and touches me on a personal level to try to understand corruption in countries.”
In a recent paper in MIS Quarterly titled, “You Can’t Bribe a Computer: Dealing with the Societal Challenge of Corruption Through ICT,” Devaraj and two co-authors measured the effect of information and communication technologies (ICT) on corruption in 63 countries, from Albania to Venezuela. Using data from the United Nations, Transparency International and the World Economic Forum, they found a strong correlation between the sophistication of a country’s e-government systems — including everything from websites that give citizens access to public information to online discussion forums that allow citizens to provide input on pending legislation — and the level of corruption.
Highly transparent countries were far less corrupt that highly opaque countries, the researchers found.
Devaraj got the idea for the paper a few years ago when he visited Singapore for the first time to give a talk at the National University of Singapore. Arriving at Changi International Airport, he was astonished at being able to pick up his luggage and walk directly to the passenger pickup zone without anyone ever checking his bag.
“In India, that would have taken about two hours, because we have so many levels of bureaucracy,” Devaraj recalled. “And once you have those layers, people are going to try to find a shortcut around them to get out faster.”
Hence the bribery.
His experience at the Singapore airport made him realize that all those bureaucratic layers were unnecessary. “It wasn’t that there weren’t any safeguards in place in Singapore, it’s just that it was done so efficiently that you didn’t know they were there.”
During his stay, he was continually amazed at the country’s technological sophistication. For instance, the Singapore police maintain a website that allows people to report a robbery online and then follow the police’s progress as they investigate it. “That plays a big part in encouraging efficiency and curbing corruption,” Devaraj noted.
Devaraj and his co-authors, Shirish C. Srivastava of HEC Paris and Thompson S. H. Teo of the National University of Singapore, hypothesized that the difference between India, which Transparency International ranks as the 76th cleanest country in the world, and Singapore, which is ranked 8th, has less to do with culture, as is commonly assumed, than with Singapore’s far superior e-government systems. After all, if culture is the primary factor, Singapore, which is dominated by ethnic Chinese, would be as corrupt as mainland China, which is ranked 83rd. As evidence of this, Devaraj cites examples of American companies found to have engaged in bribery overseas — behavior that would never have been tolerated on U.S. soil. (The United States is ranked 16th on the scale.)
“Most companies tend to take on the characteristics of the countries in which they operate,” Devaraj explained. “The fact that you come from a top-ranked country doesn’t mean that you’re going to perform fairly when you’re outside that country.” What matters isn’t corporate culture, but the governmental system in which the company operates. In countries with fair and open legal systems, businesses don’t risk engaging in bribery; in countries where the courts look the other way, they can get away with it.
After establishing a strong connection between e-government systems and low corruption, Devaraj and his co-authors broke down their findings further by examining the effect of better technology on countries’ political, legal and media institutions. They found that the greatest impact of technological development — the biggest bang for the buck, if you will — could be found in legal and media institutions.
“Media and legal institutions tend to be the government’s watchdog and enforcer institutions, respectively,” they argued in the paper, “and it is therefore imperative that corruption in these institutions be mitigated as a policy measure.”
Devaraj acknowledges that he can’t prove that better technology directly reduces corruption. It could be that the least corrupt countries are simply the most likely to set up e-government systems, while the most corrupt countries resist any attempt at greater openness. And he also acknowledges that culture plays a role in determining a country’s degree of corruption. His current research aims at determining the relative significance of those two factors, culture and technology, in the context of an individual country.
That ongoing research has brought him back to a subject he knows well — the Indian railway system. As one of the largest such systems in the world, the Indian railways offer a treasure trove of data about the effects of technological innovation on efficiency, safety and profitability, data that Devaraj hopes will give him more insight into how to fight corruption.
“Because of how large the system is, there used to be lots of opportunities for corruption and inefficiency,” he said, again citing his childhood experience fighting over seats. “Thankfully, technology’s playing a major part in bringing that down.”