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India isnt alone in having a corruption problem, nor is the size of its problem extraordinary, but the country is certainly in the top league when it comes to graft, Nobel laureate Joseph Stiglitz said on Thursday. In fact, the US would probably be a good competitor though the forms of corruption vary, he said.
To say that India's corruption is extraordinary is a comparative statement with other countries. There is certainly evidence that it is very large. But I would say that the US is, in its own style, a good competitor, Stiglitz told reporters, when asked if a lot of India's problems were due to its extraordinary corruption.
The Nobel laureate was in Bangalore to deliver a lecture on Globalisation, Structural Change and Inequality.
We don't have quite the same form. But you have the drug industry succeeding in getting a provision that says the government, the biggest buyer of drugs, cannot bargain with the drug industry. It's a provision that costs the American taxpayer $500 billion. That's up there with India in the scale of corruption, Stiglitz said.
I won't say yours is extraordinary, but you are certainly in the top league.
He also pointed out to how the US financial sector was ripe for corruption at the time of the global financial meltdown and problems in corporate governance could also be viewed as a kind of corruption.
India's corruption problem needed to be addressed because of the negative image the country was getting, Stiglitz said, when asked about the recent developments, including the victory of the Aam Aadmi Party in Delhi on the anti-corruption plank.
"They are actually right, it is a first-order issue but one shouldn't believe that solving corruption will by itself lead to economic growth. You have to have a growth agenda."
Stiglitz, who had credited former Reserve Bank of India governor YV Reddy's regulatory policies for helping India tide over the start of the economic crisis, said that the challenges were different today.
The challenge today is navigating this problem of inflation in the context of a weakening economy and that challenge is a difficult one for central bankers, he said. Getting the right balance of the regulatory framework is the real challenge, he added.