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Seoul Journal of Economics - Vol. 37 , No. 2

[ Article ]
Seoul Journal of Economics - Vol. 37, No. 2, pp. 127-152
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 May 2024
Received 11 Apr 2024 Revised 06 May 2024 Accepted 13 May 2024

Effects of Decentralization on Corruption in China
Haizhen Jin ; Byung-Yeon Kim
Industrial Systems Engineering and Management, National University of Singapore, 1 Engineering Drive, 2 Block, 117576, Singapore (
Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea (

JEL Classification: H77, D73, P30


Does decentralization exacerbate Chinese corruption? This study uses a unique quasiexperiment of the “province-managing-county” and “county-power-expansion” reforms in China from 2003 to 2015 to address this question. By improving the measures of corruption, decentralization, and institutional conditions, this study finds that decentralization can reduce corruption in China. The results remain robust after the potential endogeneity is controlled. Moreover, the establishment of appropriate institutions, such as legal and market systems, is effective in controlling corruption, whereas the current supervision system does not contribute to the reduction of corruption.

Keywords: Administrative decentralization, Fiscal decentralization, Corruption, China

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