Ha Ha !! I guess PM Manmohan Singh has read the NBER paper. However he seems reluctant to admit the problem of corruption and the basic economic and public choice arguments behind the study. Instead he decides to lash out at the public for being 'ill mannered on the road'. Whoa!! Where did that come from? Is it a response to the rediff article on the PM that asks readers to vote? Many readers seem to believe that Indians are ill mannered on the road.
Here is Prof.Tabarrok's post at Marginal Revolution. I think at many levels there is just blatant violation of the law. For example underage driving or teenagers driving without license. When a teen drives a motorcycle it seems it obvious to everyone but the traffic policeman that the kid does not have a license. Are stricter laws a solution? How about making penalties really heavy? As a libertarian my instinct is against any more laws and government interference. However, heavier penalties does seem to work. I know that if I park illegally I could get a $75 ticket, and so I never do, likewise for an accident that did not hurt or injure anyone else and just gave me a flat tyre I pay a $125 ticket. Will I be careless again, of course not!! What are the penalties for drunk driving in India Rs.500 if you get caught and are given a ticket. The most probable event is that you will not be caught at all, and even if you are caught you would probably slide a Rs.100 note to the cop and get away with it.
There is more to the corruption story in India than just moral values. Since everything works only if you bribe someone, the bribe amount is simply part of the price. After all, the government does not set the bribe prices, it is a market determined phenomenon right, so much for such and such service, and the price also varies. Its a nearly perfect example of a free market phenomenon. More on this later.