Incentives and Corruption in Chinese Economic Reform

Abstract

This paper argues that, given the legacy of Chinese communism and its political structure, corruption, together with the threat of punishment for corruption and the selective enforcement of this threat, serves as a method of compensation that both satisfies the political objectives of the Communist Party and provides an effective inducement to local officials to promote economic reform.

Keywords: Incentives, Corruption, Economic Reform, China, Communist Party

JEL Classification: D78, P21