Anti-corruption and poverty alleviation: Evidence from China

This paper studies how China’s recent anti-corruption campaign affects poverty incidence. Employing five waves of the China Family Panel Studies (CFPS) data, we find the (potential) poor households in counties that are more exposed to the anti-corruption campaign are associated with a significantly higher level of income and a consequently lower probability of being in poverty post-campaign. This finding survives a vast array of robustness checks based on alternative model specifications, measures of key variables, and sample selection criteria. We find supportive evidence for three plausible mechanisms behind the poverty-reducing effect of the anti-corruption campaign: improved access to transfer payment, reduced government expropriation, and enhanced formal credit support. However, no evidence indicates that the campaign has increased the provision of public goods. Additional analyses suggest that non-politically connected and low-income households benefit more. Overall, our study offers a novel perspective to shed light on the political economy of poverty alleviation in China.