ECONOMIC  POLICY  RESPONSES:    DE-­‐VICTIMIZING  VYAPAM    

HUMAN  CAPITAL  

CORRUPTION  

CORRUPTION  JOURNEY    OF  VYAPAM  SCAM  

40  Deaths  

2000  Arrests  

 $1.54  BN        

Economic  Loss  

SCARCITY  

LOW  OPPORTUNITY  COSTS  

EXTER-­‐NALITIES    

STUMPY  WAGES  

NATURAL  MONOPOLY   NO    

ACCOUN-­‐TABILITY  

COST  TO  SOCIETY  

EXTENT  OF  WICKEDNESS    

BREAKING  THE  SCARCITY  BARRIER  

Key  takeaways:  Increase  in  compe--on    Increase  in  the  number  of  quality  doctors  Increase  in  the  total  surplus  in  the  economy;  PS+CS  

Number  of  Medical  Colleges  (Seats)    An  Economic  soluTon  to  unlock  the  poten-al    of  Vyapam  and  advance  human  capital    to  a  higher  degree      

*WHO  s-pulates  a  minimum  ra-o  of  1:1000  

India  67th  out  133  developing  countries  number  of  doctors        

1.1  %  of  GDP  Total  public  expenditure  on  health  

9,36,000  Total  number  of  doctors  in  India    

1  doctor  for  1700  people    

Perfectly  Inelas-c  Supply  Curve  

Inelas-c  Demand  curve  

Scarcity  

WLP  

Number  of  seats  in  medical  schools  

L I M I T E D S E AT S H A S C R E AT E D A N UNREGULATED AND UNDERGROUND MARKET

INCREASING  OPPORTUNITY  COSTS  VIA  SUBSTITUTES  

Key  Takeaways:  •  Higher  opportunity  costs  of  being  a  doctor  will  shi`  career  potenTal    •  Lower  possibility  of  bribe/corrupTon  in  MPPEB  •  Less  scope  of  students  taking  medical  examinaTon  with  Vyapam  

Make  other  careers  more  abracTve,  by  increasing  the  opportunity  cost  of  being  a  doctor    

More  focus  on  becoming  doctors  and  engineers  

Parents  Pressure  

Lack  of  alternate    high  income  opportuniTes  Lack  of  feasible  and  viable  opportuniTes    in  other  mainstream  career  streams    

CONCERNS: •  UNFEASIBLE MARKET INTERFERENCE •  WHO WILL PAY

Career  in  Medicine  

Career  in  other  professions  

NEGATIVE  EXTERNALITY    

INTERNALISING  THE  EXTERNALITIES  

Key  Takeaways:  •  Increase  in  compe--on    •  Lower  scope  of  corrup-on  by                      internalizing  the  nega-ve  externality                        through  subsidies/grants  •  Lower  incen-ves  to  be  imposters  /                        fake  candidates  

WLP  

Q  

S  

D   D1  

Subsidy/Grant  

Doctor  

Bribe  payer   Bribe  taker  

Bribe  taker  Bribe  taker  

Bribe  taker  

Bribe  taker  

Police   Public  servant  

HIGH   LOW  

LOW   HIGH  

INCO

ME  

INTELLIGENTIA  

BRIBE  TA

KER  

BRIBE  PA

YER  

IncenTvizing  low  income  aspirants  Internalize  the  nega-ve  externality  by  giving  interest  free  loans,  grants,  scholarships  to  low  income  aspirants    

COST  TO  THE  SOCIETY  

INTRODUCING  BEHAVIORAL  CHANGES  

Invigilators  Low  Wages  

Bureaucrats  Low  risk,  high  gain  Less  enforcement  of    civil  sanc-ons  

Impersonators  High  rewards  through    bribes  

SubjecTve  norms  and    legal  sancTons  

IncenTves   DirecTves,  Compliant,  Punishment  

Willingness  to  accept  brib

e  W  (w

eak)/  S  (Stron

g)  

S  W   S  W   S  W  

BEHAVIOR   Reward  Emo-on  

Trigger  Context  

Habit  Behavior  

CHANGE  IN  

BREAKING  THE  MONOPOLY  

CompeTTon,  DeregulaTon,  and  PrivaTzaTon  

Ease  barrier  to  entry  Se]ng  a  price  band    

Transparent  contract  alloca-on    Public  private  partnership  

InnovaTon  and  Technology  Bio  metric  enrollments    

Online  based  examina-ons  –    Computer  Adap-ve  Mechanism  

Key  Takeaways  •  Be_er  accountability    •  Increased  transparency  •  Technical  efficiency  –  max  output  form  given  input    •  Alloca-ve  efficiency  –  best  possible  use  of  given  inputs    

Robust  growth  is  constantly  marred  by  rampant  corrup-on  across  industries,  Educa-on  and  Academic  Publishing  sectors.  Serious  repercussions  lie  towards  quality  of  educa-on  resource.  Appropriately,  checkpoints  and  constant  rigor  of  effort  to  curtail  malprac-ces  are  a  must  and  would  lead  to  a  brighter  future  of  not  only  industries  but  the  youth.    “Uneducated  and  unhealthy  working  popula5on  is  not  only  bad  for  human  wellbeing  but  also  detrimental  to  steady  and  sustained  economic  growth.  Not  a  single  industrialised  na5on  in  the  world  has  got  to  where  it  has  without  inves5ng  in  human  capital,  not  even  an  authoritarian  state  like  China”  Amartya  Sen  

LOSS DUE TO CORRUPTION $5.5 BILLION

BIZ OF EDUCATION IN INDIA

GENERATES $8 BILLION OF BLACK MONEY

TOTAL VALUE OF CORRUPTION IN INDIAN EDUCATION (UP TO 12

STANDARD) $636 MILLION

CORRUPTION:  SCAVENGING  HUMAN  CAPITAL  OF  INDIA  

APPLICATION  OF  ECONOMICS,  AS  A  TOOL  CAN  HELP  BRIDGING  THE  GAP  BETWEEN  CORRUPTION  AND  REFORMS