Kannan’s Blog

Corruption is the hot-button issue in India these days. It took an old-fashioned Gandhian technique of a hunger fast by a respected social activist, Anna Hazare, to get the government to set up a commission to see whether they should set up an Ombudsman that is independent of the three branches of government to tackle corruption.

This because the three existing branches of government have a terrible record when it comes to fighting corruption (http://www.bbc.co.uk/blogs/thereporters/soutikbiswas/2011/04/is_india_serious_about_fighting.html ). I think the real question is why is that?

I think we need to separate ‘petty corruption’ from the big-time corruption, although both contribute to a general culture of corruption where anything goes.

For petty corruption, I have a hypothesis that I would like to test, and it boils down to very simple human behavior characteristics, and the notion of pay for performance. My hunch is that government employees in India are not ‘paid for performance’. Imagine that the clerk in the ration card office is paid a bonus in addition to his or her salary that is based on how quickly they process ration cards effectively. I am willing to bet you the instances of ‘petty corruption’ will most likely disappear. My guess is that a significant part of ‘petty corruption’ is directly linked to lack of a ‘pay for performance’ system, and the corruption in this case is an induced pay for performance mechanism. If people have thoughts on this matter, do comment, I am eager to hear what you have to say.

Then there is the big-time corruption the most recent example of which is the telecom scandal. I think this corruption can only be tackled with ruthless transparency. There have to be huge consequences for both the recipients as well as the payers. One challenge is that if there is a significant ‘black economy’ where the financial transactions cannot be tracked, it makes it difficult to have transparency.

Recently, Glenn Beck and FOX News decided to part ways at the end of the year (http://www.showbizspy.com/article/230017/glenn-beck-done-with-fox-glenn-beck-is-leaving-foxs-glenn-beck.html). Part of me was vindicated as I had wondered in August of 2009 about how Glenn Beck gets away with sheer incompetence(https://kannangovindarajan.wordpress.com/2009/08/15/how-does-glenn-beck-get-away-with-it/).

However, as I saw all the media reaction including Glenn Beck’s own explanation (http://www.showbizspy.com/article/230110/glenn-beck-explains-depature-from-fox-news.html), I couldnt help but wonder a few things.

If this is indeed the 3rd highest rated show on cable TV, why would FOX not want to continue it? Could it be that more than 300 advertisers (http://stopbeck.com/dropped-sponsors/) have publicly stated why they wont advertise on his program? Whereas only a fraction of that have continued (http://defendglenn.com/advertisers.php)? I am sure FOX found it tough to charge the advertisers who continued top-billing for the 3rd highest rated show. So, net-net, this show likely didnt make much money. Definitely not as much money as its viewership seemed to suggest. Yes, there was viewership, but if they were all the conspiracy theory believing crowd, the set of advertisers who can effectively target such folks is likely very small.

So, FOX at some point would have come to the realization that this show was more trouble than it was worth, and waited for the first contractually available opportunity to get out of the contract.

But, why did Glenn Beck decide to quit? There was talk of him leaving to start his own cable network that he denied (http://www.showbizspy.com/article/229192/glenn-beck-fires-back-glenn-beck-insists-he-isnt-leaving-fox-to-start-the-glenn-beck-network.html). But, I think there is more to it than meets the eye. It does look like a significant number of ‘advertisers’ on Glenn Beck’s program were companies that Glenn Beck had interest in, such as gold companies. Now, if you were Glenn Beck, and your money was one of the main ad sources associated with your program, why would you want to give that money to FOX if you could use it to promote your own interests without anyone questioning any potential conflict of interest, etc. In addition, if what Jon Stewart says about him (“finally, a guy who says what people who aren’t thinking are thinking.”) is right, they will watch him anywhere. After all,  CNN and FOX have built up his name brand over the last decade, so why not leverage that to your own advantage?

So what value does FOX provide Glenn Beck moving forward? Apparently very little, and one can maybe see why..

So there was a mutual interest in parting ways, an amicable divorce, if you will.