Bdnews24.com

Bribery may be preferable to extortion and eliminating the latter should be prioritised in developing countries, according to a study by economists Fahad Khalil and Jacques Lawarree of the University of Washington and Sungho Yun of Hanyang University, Korea.

At a discussion Sunday at the Bangladesh Institute of Development Studies (BIDS), Fahad Khalil said extortion was far worse than bribery as it discourages 'good behaviour' among citizens.
 
According to the study, bribery occurs when an agent accepts payment offered by an individual in return for misreporting information to the benefit of that individual.
 
Whereas, extortion occurs when agents obtain payments from individuals by threatening to misreport evidence to the detriment of the individual, the report says.
 
The study, titled 'Bribery vs Extortion: Allowing the lesser of two evils', says even though both increase incentive cost, bribery penalises bad behaviour while extortion penalises even after good behaviour.
 
The analysis implies that extortion is the greater evil.
 
Bribery is also more difficult to tackle in less developed countries that rely mostly on soft evidence, compared to the developed world where hard evidence is more common, according to the findings.
 
Pushing agents to turn down bribes, moreover, may have a negative impact by encouraging them to engage in extortion, the study further claims.
 
"The study allows the deriving of two main results: extortion should always be deterred but bribery should not and bribery may be deterred when information is hard but may be allowed when information is soft," said Fahad Khalil in his presentation.
 
"The study also shows that it is more profitable to allow bribery than to deter both forms of corruption (ie bribery and extortion)," said Fahad.
 
This suggests that organisations that must rely on soft information may also need to allow bribery. By making information 'harder' an organisation will suffer from less corruption—but making information harder can be costly, the study says.
 
Developing countries with less resources and technological capabilities also have less capability to make information hard and therefore bribery should be expected as a pervasive problem, according to the study.
 
Speaking to reporters afterwards, Fahad Khalil said: "Bangladesh should go after extortion as it is a country with limited resources and it is known that making information harder can be very costly."
 
If extortion is allowed, for example in government offices, in the judiciary and law enforcement agencies, then common people will not just be encouraged to pay for 'wrong-doing' through bribery, they will be discouraged from 'doing right' altogether, he added.
 
"In this perspective, extortion should be prioritised."
 
Sunday's discussion was chaired by BIDS director general Quazi Shahabuddin.

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