Economic and Political Studies
Vol. 4, No. 1, 2016
Taking China’s anticorruption campaign seriously
This article draws on a rich empirical literature on comparative corruption and rich theoretical literatures on the related topics of institutions and credible commitment to analyze China’s newest anticorruption campaign, ongoing today. It argues that the campaign differs notably from previous efforts. In addition to its most obvious features of longer duration and higher reach, the campaign has significantly changed the structure of Party and government incentives so as to reduce bureaucratic opportunities for corruption and structural obstacles to anticorruption enforcement. These features constitute important steps toward anticorruption institutionalisation and credible commitment to good governance. The article concludes by proposing some strategic policy choices to promote and protect anticorruption gains.
Are foreign monks better at chanting? The effect of ‘airborne’ SDICs on anti-corruption
HUIHUA NIE & MENGQI WANG
The independence of supervision agency is of great importance for anti-corruption. After the leadership transition of the provincial Congress of the Chinese Communist Party in 2006, Secretaries of Discipline Inspection Commission (SDICs) were suddenly dispatched from the centre or transferred from another province in China (‘airborne’ SDICs) to enhance their independence in inspecting corruption cases. To investigate the effect of this policy reform, we collect data of SDICs and anti-corruption in 31 provinces from 2003 to 2014, and evaluate this policy using the difference-in-differences econometrics method. We find that there is no significant effect of these ‘airborne’ SDICs whether from the centre or another province on anti-corruption. This result is robust to different measurements of anti-corruption and subsamples. We argue that the dispatch of external SDICs is not enough to ensure the independence of supervision agency, because local discipline inspection commissions (DICs) are still subject to local Chinese Communist Party committees in terms of personnel, funds and property. This paper has important policy implications for the current anti-corruption campaign in China.
Anti-corruption, marketisation and firm behaviours: evidence from firm innovation in China
LI DANG & RUILONG YANG
China has launched an anti-corruption campaign since the Eighteenth CPC National Congress, which has exerted widespread influences on Chinese politics and economy. This paper examines the effect of the anti-corruption initiative on firm behaviours from the perspective of research and development (R&D) investments. It shows that pursuing political connections and improving innovation are two mutually exclusive alternatives for firm growth in China. The anti-corruption campaign raises the cost of seeking for political bond and strengthens the incentive for firm innovation. After anti-corruption policies and regulations were issued, R&D expenditure in politically connected firms increases significantly; the anti-corruption initiative has positive effects on firm innovation. Further research shows that the effects vary with different types of firms. For state-owned enterprises (SOEs), the anti-corruption initiative only increases the R&D investments of firms with senior executives who used to serve in the government; while for non-state-owned enterprises (non-SOEs), this campaign has all-around positive effects on their R&D investments. In the meantime, a heterogeneity at the provincial level is observed: R&D investments of firms with political connections increase more significantly in provinces with more intense anti-corruption efforts. Finally, marketisation also has a role to play. For regions with a more developed market economy, anti-corruption increases the innovation of firms with political connections; whereas in regions with a less developed market economy, this effect is insignificant. This paper provides evidence for the opinion that anti-corruption is favourable to economic growth in China. To solve the endogeneity problem, it uses data obtained from the anti-corruption policy experiment since the Eighteenth CPC National Congress and the difference-in-differences (DID) method to further test the hypotheses.
The politics of anti-corruption reforms and reversals in Uganda’s changing political terrain
The article discusses the increasing levels of public sector corruption despite the NRM government’s pursuing of accountability reforms and anti-corruption policy strategies. It asserts that having an impressive legal and institutional framework in place to enhance accountability and control corrupt tendencies may not be enough if political factors are ignored. In the absence of exemplary political leadership and support to institutions that enforce compliance, fighting corruption will remain a far cry. The article further argues that in circumstances where the political terrain ascribes to patron-client and neo-patrimonial instruments to consolidate and retain power, curbing public sector corruption will be elusive. The article insists that fighting public sector corruption largely depends on political commitment and less on the semblance of laws, institutions and technocrats.
Corruption and economic growth: an absolute obstacle or some efficient grease?
The relationship between bureaucratic corruption and economic growth has been a much debated topic in the studies of economics and political science in the past decades. However, no theoretical consensus has been reached in this field. Corresponding to the divergence in theoretical perspectives, empirical evidence is mixed as well. As a fundamental step to examine the correlation between corruption and economic growth, this review provides a systematic review of the existing theoretical and empirical research on corruption’s growth effects. Meanwhile, the definition and statistical measurement of corruption is also discussed. This review makes new contributions to the extant corruption literature since it not only incorporates the latest scholarship on the topic but highlights corruption’s differential growth effects in different organisational, institutional and geographical contexts.