Incentivizing Corruption: An Unintended Consequence of Bureaucratic Promotions in China

35 Pages Posted: 21 Jul 2019

See all articles by Xu Xu

Xu Xu

Pennsylvania State University - Department of Political Science

Date Written: June 21, 2019

Abstract

Conventional wisdom holds that in non-democracies, a strong central state can reward and punish local administrations through a merit-based promotion system, which should restrain officials’ “grabbing hand”. But much evidence shows rampant corruption in countries with a powerful central government. This study argues that merit-based promotions can be compromised by three disincentives: factional politics at upper-level administrations, a lack of serious punishments for wrong-doing, and difficulties in evaluating officials’ performance, each of which is common in non-democracies. As a result, promotions could incentivize corruption. Using a fuzzy regression discontinuity design exploiting exogenous variations in officials’ promotion incentive from a mandatory age cutoff for promotion, combined with a biographical database of prefecture party secretaries and novel measures of corruption, I find that promotions encourage corruption in China. Moreover, prefecture party secretaries are more corrupt if their provincial superiors are connected to central factions, suggesting that upper-level factionalism is one of the disincentives that breaks down lower-level meritocracy.

Keywords: corruption, promotion, bribe, meritocracy, factionalism

Suggested Citation

Xu, Xu, Incentivizing Corruption: An Unintended Consequence of Bureaucratic Promotions in China (June 21, 2019). Available at SSRN: https://ssrn.com/abstract=3423630 or http://dx.doi.org/10.2139/ssrn.3423630

Xu Xu (Contact Author)

Pennsylvania State University - Department of Political Science ( email )

University Park, State College, PA 16801
United States

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