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Fiscal pressure and judicial decisions: Evidence from financial penalties for official corruption in China

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  • Chu, Hongli
  • Sun, Shengmin
  • Wei, Jian

Abstract

The connection between court resources and judicial behavior has long been acknowledged. This article examines the linkages between local governments' fiscal pressures and Chinese judges' decisions on financial sanctions. Based on data from criminal verdicts of official corruption and county government expenditures, this study finds that Chinese judges are more likely to impose financial penalties, especially fines, when judicial expenditures in a region are low. The conclusion remains unchanged after accounting for the endogeneity problem using the age of the county party secretary and the per capita financial expenditure lagged for one period as instrumental variables. Finally, the imprisonment penalty without increasing revenue is used to test the placebo, and no effect of fiscal pressure on the imprisonment penalty is found.

Suggested Citation

  • Chu, Hongli & Sun, Shengmin & Wei, Jian, 2024. "Fiscal pressure and judicial decisions: Evidence from financial penalties for official corruption in China," International Review of Law and Economics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:irlaec:v:77:y:2024:i:c:s0144818823000340
    DOI: 10.1016/j.irle.2023.106156
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    References listed on IDEAS

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    More about this item

    Keywords

    Corruption punishment; Financial penalty; Judicial expenditure; Fiscal pressure;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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