The Causes of Corruption: Evidence from China

41 Pages Posted: 21 Jun 2010

See all articles by Bin Dong

Bin Dong

Queensland University of Technology

Benno Torgler

Queensland University of Technology; CREMA; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: June 21, 2010

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.

Keywords: Corruption, China, Government, Decentralization, Deterrence, Social Heterogeneity

JEL Classification: D730, H110, K420

Suggested Citation

Dong, Bin and Torgler, Benno, The Causes of Corruption: Evidence from China (June 21, 2010). FEEM Working Paper No. 72.2010. Available at SSRN: https://ssrn.com/abstract=1628107 or http://dx.doi.org/10.2139/ssrn.1628107

Bin Dong

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Benno Torgler (Contact Author)

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

CREMA

Gellertstrasse 18
Basel
Zurich, CH 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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