

Beating bribery through fake money - r0h1n
http://www.economist.com/news/international/21591198-increasingly-popular-weapon-fight-against-corruption-fake-money-small-change

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nationcrafting
I've often thought about the bribery that occurs in Peru (and, presumably,
many other countries) when a policeman stops your car for some minor
infraction, to accept a bribe in exchange for letting you go without a ticket.

The usual thinking is that this is bribery and that it is corrosive on the
morals of society.

But, the way I see it, this system is actually a better system for price
discovery than the legal route. In other words, it's a better and more
efficient system for finding out what the price of a minor infraction should
be.

If you think about it, the official penalty for an infraction is set by a
small committee of people claiming to represent the people by being voted into
power or through some other democratic method.

But, the quality of information available to this small committee is much
lower than the aggregate information the market has in its totality. The price
signals that dictate the amount of a bribe are therefore best emitted by the
market itself. Some groups in the market will want the price to be higher,
others will want it to be lower. If general society drives well, without
infractions, the policeman will be forced by market forces to charge a higher
bribe to the few that drive badly, which means that the price will reflect
accurately how people view the act of driving badly. Similarly, if a lot of
people drive badly, the bribe will be lower, again reflecting the fact that
society doesn't see bad driving as something that should be heavily penalised.

So, in this particular sector at least, you could argue that the bribe system
is actually more just and representative of the will of the people than any
arbitrary penalty system decided by its legal representatives.

~~~
rational_indian
All the benefits of this system can still be accrured if the "bribe" does not
go into the pockets of the policemen. It has to go into the public treasury
for the common good of the people.

~~~
nationcrafting
If you forget the word "bribe" and think of it the way you would think about a
waiter's tip, you'll see that it doesn't have to go into the public treasury
to be a good system.

If there's a financial incentive for policemen to catch bad drivers, they will
do their job better already, much in the way that restaurants where waiters
earn more on tips than they do on a salary generally provide good service.

