ABSTRACT

This chapter discusses the impact of corruption and cronyism on societies around the world, and presents the crucial differences between the related concepts of corruption and cronyism. It explores how corruption and cronyism have affected business and society in India and how the economic liberalization and its resultant growth can help reduce corruption and cronyism. The fundamental distinction between cronyism and corruption is that cronyism is based on a tie or a connection or relationship between actors and involves implicit, unspecified, and reciprocal transactions with no stipulation of a time period during which favours must be returned. Influence market corruption deals in access to decision-makers and policy implementers within strong state institutions; often politicians serve as middlemen, trading connections for contributions both legal and otherwise. The administrative systems and social, economic, and political institutions that exist in India show the deep imprint of the Congress Party’s philosophy and policies.