Sorry.
You are not permitted to access the full text of articles.
If you have any questions about permissions,
please contact the Society.
์ฃ์กํฉ๋๋ค.
ํ์๋์ ๋ ผ๋ฌธ ์ด์ฉ ๊ถํ์ด ์์ต๋๋ค.
๊ถํ ๊ด๋ จ ๋ฌธ์๋ ํํ๋ก ๋ถํ ๋๋ฆฝ๋๋ค.
[ 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 | |
DOI: https://doi.org/10.22904/sje.2024.37.2.002 | |
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 (jinhz@nus.edu.sg) | |
Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea (kimby@snu.ac.kr) | |
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 |
1. | Albornoz, F., and Cabrales, A., “Decentralization, political competition and corruption.” Journal of Development Economics 105(2013): 103-111. |
2. | Blanchard, O., and Shleifer, A., “Federalism with and without political centralization: China versus Russia.” IMF staff papers 48(No. 1 2001): 171-179. |
3. | Brennan, G., and Buchanan, J. M., The power to tax: Analytic foundations of a fiscal constitution, Cambridge University Press, 1980. |
4. | Brunetti, A., and Weder, B., “A free press is bad news for corruption.” Journal of Public economics 87(No. 7-8 2003): 1801-1824. |
5. | Chen, H., Schneider, F., and Sun, Q., Size, Determinants, and Consequences of Corruption in China’s Provinces: The MIMIC Approach, CESEifo Working Paper No. 7175, 2018. |
6. | Choudhury, S., “Non-random selection into entrepreneurship in the realm of government decentralization and corruption.” European Journal of Political Economy 78(No. 102377 2023). |
7. | Deng, S., Peng, J., and Wang, C., “Fiscal transparency at the Chinese provincial level.” Public Administration 91(No. 4 2013): 947-963. |
8. | Dong, B., and Torgler, B., “Causes of corruption: Evidence from China.” China Economic Review 26(2013): 152-169. |
9. | Egorov, G., Guriev, S., and Sonin, K., “Why resource-poor dictators allow freer media: A theory and evidence from panel data.” American Political Science Review 103(No. 4 2009): 645-668. |
10. | Enikolopov, R., and Zhuravskaya, E., “Decentralization and political institutions.” Journal of Public Economics 91(No. 11-12 2007): 2261-2290. |
11. | Fan, C. S., Lin, C., and Treisman, D., “Political decentralization and corruption: Evidence from around the world.” Journal of Public Economics 93(No.1-2 2009): 14-34. |
12. | Fisman, R., and Gatti, R., “Decentralization and corruption: evidence across countries.” Journal of Public Economics 83(No. 3 2002a): 325-345. |
13. | Fisman, R., and Gatti, R., “Decentralization and corruption: Evidence from U.S. federal transfer programs.” Public Choice 113(No. 1 2002b): 25-35. |
14. | François, A., and Méon, P. G., “Politicians at higher levels of government are perceived as more corrupt.” European journal of political economy 67(No. 101962 2021) |
15. | Freille, S., Haque, M. E., and Kneller, R., Federalism, decentralisation and corruption, Available at SSRN 951110, 2007. |
16. | Goel, R. K., and Nelson, M. A., “Government fragmentation versus fiscal decentralization and corruption.” Public Choice 148(No. 3-4 2011): 471-490. |
17. | Goel, R. K., and Rich, D. P., “On the economic incentives for taking bribes.” Public Choice 61(No. 3 1989): 269-275. |
18. | Gong, Q., Liu, C., and Wu, M., “Does administrative decentralization enhance economic growth? Evidence from a quasi-natural experiment in China.” Economic Modelling 94(2021): 945-952. |
19. | Gong, T., and Zhou, N., “Corruption and marketization: Formal and informal rules in Chinese public procurement.” Regulation & Governance 9(No. 1 2015): 63-76. |
20. | Haley, U. C., “Corporate governance and restructuring in East Asia: An overview.” Seoul Journal of Economics 13(No. 3 2000): 225-252. |
21. | Huang, J. “Problems under the background of free f iscal decentralization.” Economic System Reform 6(2006): 107-111. |
22. | Ivanyna, M., and Shah, A., “Decentralization and corruption: new cross-country evidence.” Environment and Planning C: Government and Policy 29(No. 2 2011): 344-362. |
23. | Iwasaki, I., and Suzuki, T., “The determinants of corruption in transition economies.” Economics Letters 114(No. 1 2012): 54-60. |
24. | Jiang, H., and Liu, X., “The Evaluation of China’s Provincial Fiscal Transparency.” Journal of Shanghai University of Finance and Economics 11(No. 2 2009): 50-58. |
25. | Jin, H. “Effects of decentralization on firm performance: Evidence from Chinese county-level quasi-experiments.” Economic Modelling 119(No. 106116 2022). |
26. | Jin, H., Qian, Y., & Weingast, B. R. (2005). Regional decentralization and fiscal incentives: Federalism, Chinese style. Journal of Public Economics, 89(9-10), 1719-1742. |
27. | King, G., Pan, J., and Roberts, M. E., “How censorship in China allows government criticism but silences collective expression.” American Political Science Review 107(No. 2 2013): 326-343. |
28. | Klitgaard, R., Controlling corruption, Univ of California Press, 1991. |
29. | Ko, K., and Zhi, H., “Fiscal decentralization: guilty of aggravating corruption in China?” Journal of Contemporary China 22(No. 79 2013): 35-55. |
30. | Kyriacou, A. P., and Roca-Sagalés, O., “Fiscal and political decentralization and government quality.” Environment and Planning C: Government and Policy 29(No. 2 2011): 204-223. |
31. | Lederman, D., Loayza, N. V., and Soares, R. R., “Accountability and corruption: Political institutions matter.” Economics & Politics 17(No. 1 2005): 1-35. |
32. | Lessmann, C., and Markwardt, G., “One size fits all? Decentralization, corruption, and the monitoring of bureaucrats.” World Development 38(No. 4 2010): 631-646. |
33. | Li, J., “Fiscal decentralization, information disclosure and official corruption: the dual analysis on the macro and micro environment.” Accounting and Economic Research 30(No. 3 2016): 25-44. |
34. | Li, P., Lu, Y., and Wang, J., “Does flattening government improve economic performance? Evidence from China.” Journal of Development Economics 123(2016): 18–37. |
35. | Li, S., Li, S., and Zhang, W., “The road to capitalism: Competition and institutional change in China.” Journal of Comparative Economics 28(No. 2 2000): 269-292. |
36. | Lin, J. Y., and Liu, Z., “Fiscal decentralization and economic growth in China.” Economic Development and Cultural Change 49(No. 1 2000): 1-21. |
37. | Lindstedt, C., and Naurin, D., “Transparency is not enough: Making transparency effective in reducing corruption.” International Political Science Review 31(No. 3 2010): 301-322. |
38. | Liu, X., Deng, S., and Wen, J., “The Evaluation of China’s Provincial Fiscal Transparency.” Journal of Shanghai University of Finance and Economics 12(No. 3 2010): 50-57. |
39. | Lorentzen, P., “China’s strategic censorship.” American Journal of political science 58(No. 2 2014): 402-414. |
40. | Luo, Y., Duan, L., and Hu, C., “Fiscal decentralization, government scale expansion and official corruption: Evidence from China’s inter-provincial dynamic panel data.” Shanghai Economic Research 1(2015): 59-68. |
41. | Nie, H., “The Impact of Corruption on Economic Efficiency: A Survey.” Chinese Review of Financial Studies 1(2014): 13-23. |
42. | Oto-Peralías, D., Romero-Ávila, D., and Usabiaga, C., “Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?” European Journal of Political Economy 32(2013): 205-231. |
43. | Pan, C., He, L., and Yuan, C., “Fiscal decentralization and official corruption: An Empirical study based on China’s provincial panel data from 1999 to 2007.” Contemporary Finance&Economics(2011): 38-46. |
44. | Prud’Homme, R., “The dangers of decentralization.” The world bank research observer 10(No. 2 1995): 201-220. |
45. | Qian, Y., and Roland, G., “Federalism and the soft budget constraint.” American Economic Review 88(No. 5 1998): 1143-1162. |
46. | Qian, Y., and Weingast, B. R., “Federalism as a commitment to reserving market incentives.” Journal of Economic Perspectives 11(No. 4 1997): 83-92. |
47. | Qin, B., Strömberg, D., and Wu, Y., “Media bias in China.” American Economic Review 108(No. 9 2018): 2442-2476. |
48. | Qu, G., Sylwester, K., and Wang, F., “Anticorruption and growth: Evidence from China.” European Journal of Political Economy 55(2018): 373-390. |
49. | Reinikka, R., and Svensson, J., “Fighting corruption to improve schooling: Evidence from a newspaper campaign in Uganda.” Journal of the European Economic Association 3(No. 2-3 2005): 259-267. |
50. | Seabright, P., “Accountability and decentralisation in government: An incomplete contracts model.” European Economic Review 40(No. 1 1996): 61-89. |
51. | Shen, C., Jin, J., and Zou, H. F., “Fiscal Decentralization in China: History, Impact, Challenges and Next Steps.” Annals of Economics & Finance 13(No. 1 2012): 1-51. |
52. | Shleifer, A., and Vishny, R. W., “Corruption.” The Quarterly Journal of Economics 108(No. 3 1993): 599-617. |
53. | Thornton, J., “Fiscal decentralization and economic growth reconsidered.” Journal of Urban Economics 61(No. 1 2007): 64-70. |
54. | Tiebout, C. M., “A pure theory of local expenditures.” Journal of Political Economy 64(No. 5 1956): 416-424 |
55. | Treisman, D., “The causes of corruption: a cross-national study.” Journal of Public Economics 76(No. 3 2000): 399-457. |
56. | Treisman, D., Decentralization and the Quality of Government, unpublished paper, Department of Political Science, UCLA, 2002. |
57. | Wang, F., Yao, S., and Qu, G. “Sustainable and Steady Economic Growth under Anticorruption in China.” Economic Research, 53(No. 1 2018): 65-80. |
58. | Weingast, B. R., “The economic role of political institutions: Market-preserving federalism and economic development.” The Journal of Law, Economics, and Organization 11(No. 1 1995): 1-31. |
59. | Weingast, B. R., “Second-generation fiscal federalism: The implications of fiscal incentives.” Journal of Urban Economics 65(No. 3 2009): 279-293. |
60. | Wu, X., and Wang, Y., “Fiscal decentralization, economic responsibility audit function and official corruption: An empirical study based on provincial panel data.” Economic Issues 12(2016): 124-128. |
61. | Wu, Y., “Fiscal decentralization, corruption, and governance.” Economic Quarterly 7(No. 3 2008): 1045-1060. |
62. | Xu, G., and Yano, G., “How does anti-corruption affect corporate innovation? Evidence from recent anti-corruption efforts in China.” Journal of Comparative Economics 45(No. 3 2017): 498-519. |
63. | Zhang, K., “The “Province-managing-county” fiscal reform from the perspective of policy diffusion: An exploratory analysis based on the data of 20 provinces.” Journal of Beijing Administration Institute 1(2017): 17-26. |
Editorial Office, Seoul Journal of Economics, Institute of Economic Research, Seoul National University 599 Gwanangno, Gwanak-gu, Seoul 151-746, Korea
Tel: +82-2-880-5434 | Fax: +82-2-888-4454 | E-mail: sje@plaza.snu.ac.kr
Copyright (c) 2020 SJE. All rights reserved.