It is the failure of basic economics education in India that makes it suffer so badly.
Most Indians believe that there is something wrong with the fundamental Indian character. They are wrong.
The Indian is no more nor any less susceptible to opportunism as any other human being in this world.
The difference is that Western thinkers have realised that most of them are natural born cheaters, and have developed theories, models, and systems to control such behaviour. In India, however, we have UTTER FOOLS (socialists) who believe in exhortation against corruption. Exhortation is the WORST method to bring integrity into public life. It always backfires. Chanakya understood that better than anyone. The West, too, understands it well enough.
Gordon Tullock is one of the most brilliant economists alive. I'm extracting a short section from my copy of his book, The New World of Economics. This book is a must-read (and must have) for anyone who wants to understand the world. Also, here's a free PDF of a book co-authored by Tullock:Government Failure: A Primer in Public Choice.
Cheating is a continual problem in all educational institutions. Exactly how much cheating is likely to go on across a university campus is unclear at this point, but we do have several very interesting studies.
Charles Tittle and Alan Rowe, both sociologists, designed a study to determine the influence that moral appeal and threat of sanction had on the amount of cheating that went on in their classes.
To do this, they gave weekly quizzes to their students; the instructors took the quizzes, graded them without marking the papers, and then, at the next class meeting, returned them to the students for them to grade. Without any appeal being made to the students that they were on their honor to grade them correctly, the students in one test group took 31 percent of all opportunities to cheat; the other test group took 41 percent of all opportunities.
Next the instructors made an appeal to the students' sense of morality in grading the papers, and the instructors concluded that "emphasizing the moral principle involved in grading the quizzes was also ineffectual. A moral appeal had no effect whatsoever in reducing the incidence of cheating."' In fact, in one of the test groups, the amount of cheating went up substantially after the appeal was made.
AUDITS WORK! (As Chanakya said)
Finally the instructors threatened to spot check the quizzes for cheating, and the amount of cheating fell sharply from the 41-percent range to 13 percent in one class and from 43 percent to 32 percent in the other.
They also concluded from the study that the instructor who had a reputation of being "lovable and understanding" had the greater amount of cheating in his class, and they found that " . . . Those who were most in need of points were willing to take greater risks (that is, cheated more). This is consistent with the theory that the greater the utility of an act, the greater the potential punishment required to deter it. And perhaps it shows the futility of a moral appeal in a social context where all individuals are not successful."
One of the authors of this book replicated the above study in a somewhat different form and, in this case, for a slightly different purpose. He wanted to see how many students would cheat on a test which the students were told would not be considered in their grades.
He gave his classes in Principles of Economics a test on the first day of the term; he had their answer sheets photocopied and the copies graded by a graduate student. During the next class session, his secretary gave back the original answer sheets and called out the correct answers. Later, by comparing the copy and the original answer sheet, it was found that 15 percent of the students cheated, and this was on something that had no bearing on their grades.
As a point of interest, one student was rather ingenious in the way in which he cheated. In taking the test, he had left the last eight answers blank; when he was given a chance to correct his own, he filled in the answers. Because he apparently did not want it to appear too obvious what he had done, he intentionally missed three of them and marked them wrong like all the others that he had missed!
This is no new development. Several decades ago, Hartshorne and May undertook a study of several thousand children in the fourth through eighth grades. Their study, which has not been seriously disputed, is considered a classic within the psychology profession. One of their tests was to give the students a set of examinations in which the students could cheat with ease but the instructor would always know that they had cheated.
Approximately 97 percent of the students cheated at least once. The Hartshorne and May conclusion is striking: "No one is honest or dishonest by nature."