In an attempt to fight corruption, a local NGO in Chennai has begun to print zero-rupee bills. When public officials demand a bribe in exchange for a service, the people hand over a zero-rupee bill as a protest against petty bribery and corruption. The bills have proven so popular that the NGO has had to make a second, much bigger printing run of the bills.

Currently, everyone pays bribes and the people are worse off, overall and relative to the government officials. If I want to protest and choose not to pay a bribe, the government official will laugh in my face. Everyone else is paying bribes, so he doesn’t really need my money. Thousands of individuals face this scenario, and all choose to pay the bribe.

However, the popularity of the zero-rupee bill movement allows the people to coordinate and collectively pay zero bribes to the government officials. Because the movement is popular, and because many bills have been printed, I can confidently choose not to pay the bribe because I know that there are many other people also choosing not to pay.

The success of the movement depends on the incentives of the government officials. At the beginning of the movement, government officials will process no papers, and do no work, without bribes. If the officials can be fired for doing no work, then surely they will eventually begin to perform their job functions without the customary baksheesh, and everyone will be better off. However, if the officials’ job security is not related to the amount of service that they provide, then this movement may lead to the total shutdown of government, which may or may not be a good thing.

Evidence exists for each possible direction. In negotiations, the general principle is that the side that has more patience will win. China, for example, was willing to wait one hundred years to receive control of Hong Kong. The public officials are probably unionized, and as members of government, their jobs are probably hardly dependent on the amount of work that they do. In other words, they will have little incentive to continue doing work in the absence of petty bribes.

In 2005, a group of economists from MIT was approached by the Rajasthan police department, who wanted to improve both their performance and the perception of the police among members of the public. The team implemented a few changes, including a three-day communication and public relation training module, a work-rotation schedule where every police member took turns doing different jobs within the station, and community observation, where community members were invited to sit in the station in three-hour shifts, to facilitate communication and improved performance. These interventions led to a reduction in the number of people who reported fear of the police, and an increased feeling on the part of crime victims (and criminals) that they were being treated fairly (read the project summary here).

One interesting finding from this survey was that the rank-and-file police felt underappreciated, overworked and victims of manipulation by their superiors. These feelings may lead them to seek bribes from the public. This zero-rupee movement may in turn lead them to try and effect change within their institution, rather than trying to pass on their hurt feelings to rank-and-file members of the community.

On the other hand, the Rajasthan reform project was initiated by leaders within the police unit, who cooperated with the proposed reforms. The zero-rupee movement was initiated by members of the public and may lack support from the bureaucratic elite. I am doubtful the movement will have lasting positive effects, but I would love to be proven wrong.

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