By Rupa Subramanya

    Sajjad Hussain/Agence France-Presse/Getty Images
    Tipping is related to the service you’ve already received, but after a satisfying experience, you may also hope that a tip makes a difference to the quality of service you receive in future, says Rupa Subramanya .

    When you eat out, order takeaway, have groceries delivered or get a haircut, tipping the service provider shows your appreciation for the service rendered, in India as elsewhere.

    A tip of 10-15% is typical in India, and will vary depending on how you rate the service, your familiarity with the service provider, how often you frequent a place. At high-end restaurants or five star hotels, a service charge is usually included in the final bill, in which case most Indians don’t leave a tip.


    Tipping is related to the service you’ve already received, but after a satisfying experience, you may also hope that a tip makes a difference to the quality of service you receive in future if you expect to be a repeat customer.

    The incentive structure linking good service and a generous tip is something that is well understood by people whose earnings depend substantially on tips. It is also understood by their employers, and indeed is factored in by the market. In the U.S. and Canada, for example, restaurant servers are routinely paid the minimum legally allowable wage, with the understanding that this will be topped up by their tips. A waiter or waitress at even a modest neighborhood eatery or pub would expect to make a good chunk of their daily earnings in tips. Providing good service is obviously in their interest.

    In the helter-skelter of the modern Indian economy, where many restaurants thrive, private clubs generally don’t allow tipping. They seem to live in a quasi-feudal afterlife of the British Raj. The reasoning is that tipping would monetize the relationship between club member and staff. In the words of the 19th century Scottish writer Thomas Carlyle, this would create a “cash nexus” between member and employee, and thus corrode what should be a cordial, familial relationship. (Carlyle also coined the phrase “dismal science” to describe economics.)

    Quasi-feudal scruples or not, such rules don’t stop most members at these exclusive clubs from surreptitiously slipping a few rupees in cash as a tip, often conveniently tucked under a signed bill that is the form of currency in these places. As anyone who’s frequented such clubs knows, tipping, even though it’s against the rules, works. You can spot members who tip, as staff are falling over themselves to provide quick service, while those who don’t tip often wait ages for a server to even make eye contact.

    Furthermore, most middle class Indians, even those who don’t frequent restaurants and clubs, rely on a host of service providers to help run their homes. A regular tip (in cash or in kind) or bonus to the maid, driver, or building watchman, while not necessarily guaranteeing great service, should ensure at the very least that they minimally do their job.

    By now, you might think that tipping when you feel you shouldn’t sounds more like a bribe, and you’re probably right. Most of us tend to think that tipping and bribing are ethically two distinct concepts. Tipping is legal, and rewards good service; bribery is illegal, and is meant to induce good “service” (such as tearing up a parking ticket or putting you at the head of a queue.) In practice, however, the boundaries are often blurred. As the example of tipping at private clubs shows, it both rewards quick service and is used as an incentive to ensure speedy service in future. And it is against the rules.

    New research supports this link between tipping and bribing. A study by organizational behavior scholars Magnus Thor Torfason of Harvard Business School and  Francis Flynn and Daniella Kupor of Stanford University, shows a statistical correlation between bribing, seen as immoral in most cultures, and tipping, which is generally regarded as acceptable.

    Using a cross-national data set for 32 countries, Mr. Torfason and his colleagues constructed a tipping index that tries to measure the prevalence of tipping in different countries. This was matched with a bribery index, based on Transparency International’s Corruption Perceptions Index.

    They found that countries with higher rates of tipping behavior also show higher rates of corruption, notably bribing. What’s more, this relationship statistically accounts for the effects of other dimensions that could influence both tipping and bribing, such as a country’s GDP, its level of income inequality, and cultural factors. In other words, the connection between tipping and corruption isn’t being driven by these other factors. In the U.S. where tipping is highly prevalent, controlling for GDP, the authors find that relative to other similarly wealthy countries, the U.S. has higher rates of corruption.

    The researchers explain their findings by referring to the psychological concept known as “temporal focus.” To the extent that tipping represents an attempt to get better service in future, rather than a reward for past service, it might make someone more predisposed to give a bribe, to achieve exactly the same end.

    To bring home their point, they compare two countries, Canada and India, which score similarly on tipping but very differently on corruption (with India scoring much worse than Canada.) Their study showed that Canadians are much more likely to view a tip as a reward for good service, while Indians are more likely to see it as an inducement for future good service.

    Psychologically, tipping seems to serve different functions in the two countries, which also helps explain the big difference between the two on corruption. While debates focus on issues of large scale corruption in India, very often the roots could lie much closer to home.


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