I think Sid has given a correct angle to this debate. The lack of low-level corruption in the US is because of capitalism (I'd change the argument slightly and call it competition) and not because Americans are more morally upright or patriot. You take away competition and give too much power without clear accountability, and you'd see corruption. I am sure there would be corruption in the police in the US. Not of the kind where they catch you without helmet and ask you to pay 100 bucks. But where they have dealings with drug dealers.
Even in India, things have changed wherever competition is there. In 1980s, one couldn't get a landline in years without paying off several people. One can now own a mobile instantly and even a landline gets done much quickly (incidentally much more quickly than UK). Even if you are applying through MTNL. Earlier, they would make your phone go dead and you'd have to pay them money to get it to work again. Now, you don't even see them, just make a complaint and it gets done. It is because they have all these private companies threatening their very survival. They may still not be as good as the private companies (years of attitude doesn't change overnight), but they are much better than what they used to be. The same is not true of driving license, passport, etc, as there is no competition.
Competition is not a necessary condition. Corruption is massively reduced if you make it institutionally difficult to demand/offer bribes. For example, most of the Income Tax corruption in India is because of a system where IT officers have the power to personally contact specific individuals for tax collection. The power to raid is used to harass individuals. If you randomly assign IT officers to cases, then get them to contact the individual through email, letter or phone (recorded line), and give the power to raid only when absolutely necessary and through explicit court order, it'd change things. It is much difficult to accept or offer bribes when you know that your conversation is being recorded. Similarly, one sees a lot of corruption where one has to personally get the paper work done by contacting a multitude of agencies/individuals. Every additional step only increases the probability of money changing hands. Instead, there should be a single window system where you just submit your papers (preferrably to an outsourced firm). The rest should happen automatically within the organization without anyone "interacting" with you and finally you should just get a written response that your application is successful/rejected with the next steps if it has been rejected (to be again submitted through the single window). If you have to "appear" before any officer with your "case", that only provides an avenue to offer/solicit bribes. You cut the link and you reduce the bribing significantly.
ho ho kalee rang ka Aryan hazir hae Jahapanah! 
