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The Causes of Corruption: Evidence from China

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  • Bin Dong
  • Benno Torgler

Abstract

In this study we explore in detail the causes of corruption in China using two different sets of data at the regional level (provinces and cities). We observe that regions with more anti-corruption efforts, histories of British rule, higher openness, more access to media and relatively higher wages of government employees are markedly less corrupt; while social heterogeneity, regulation, abundance of resource and state-owned enterprises substantially breed regional corruption. Moreover, fiscal decentralization is discovered to depress corruption significantly, while administrative decentralization fosters local corruption. We also find that there is currently a positive relationship between corruption and economic development in China that is mainly driven by the transition to a market economy.

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  • Bin Dong & Benno Torgler, 2010. "The Causes of Corruption: Evidence from China," CREMA Working Paper Series 2010-07, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2010-07
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    Cited by:

    1. Belousova, Veronika & Rajeev, K. Goel & Korhonen, Iikka, 2011. "Causes of Corruption in Russia: A Disaggregated Analysis," Discussion Paper Series 557, Institute of Economic Research, Hitotsubashi University.
    2. Belousova, Veronika & Rajeev, K. Goel & Korhonen, Iikka, 2011. "Causes of Corruption in Russia: A Disaggregated Analysis," Discussion Paper Series 557, Institute of Economic Research, Hitotsubashi University.
    3. Cousin, Violaine, 2011. "中监为体、西监为用 or the specifics of Chinese bank regulation," MPRA Paper 36040, University Library of Munich, Germany.
    4. repec:zbw:bofitp:2011_031 is not listed on IDEAS
    5. Bin Dong & Benno Torgler, 2010. "The Consequences of Corruption: Evidence from China," Working Papers 2010.73, Fondazione Eni Enrico Mattei.
    6. Rajeev Goel & Jelena Budak & Edo Rajh, 2012. "Factors Driving Bribe Payments: Survey Evidence from Croatia," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(1), pages 13-22, September.
    7. Bo Sui & Gen-Fu Feng & Chun-Ping Chang, 2018. "The pioneer evidence of contagious corruption," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(2), pages 945-968, March.
    8. Lian, Hongping & Li, Hui & Ko, Kilkon, 2019. "Market-led transactions and illegal land use: Evidence from China," Land Use Policy, Elsevier, vol. 84(C), pages 12-20.
    9. repec:hhs:bofitp:2011_031 is not listed on IDEAS
    10. Veronika Belousova & Rajeev Goel & Iikka Korhonen, 2016. "Corruption perceptions versus corruption incidence: Competition for rents across Russian regions," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 172-187, January.

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    More about this item

    Keywords

    Corruption; China; Government; Decentralization; Deterrence; Social Heterogenity;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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