corruption and anticorruption reform losing the country or losing the party? corruption in mainland...

CORRUPTION AND ANTICORRUPTION REFORMLosing the Country or Losing the Party?

Corruption in mainland China: how serious a problem, comparatively speaking? Serious, widespread, growing

Dilemma: widespread corruption as an equilibrium

Anticorruption reform: serious effort, seriously flawed Agency design problem Institutional design problem Constitutional design problem

CORRUPTION: SERIOUS, WIDESPREAD, GROWING

At highest levels of leadership

Across bureaucracies and down to lowest levels

An economic problem Loss of state revenues Lower foreign direct investment

A political problem Public opinion polls Urban and rural unrest

TRANSPARENCY INTERNATIONALCORRUPTION PERCEPTIONS INDEX 2005

158 countries surveyed

CPI index: 0-10, with 0 most corrupt

Least corrupt country: Iceland at 9.7 Most corrupt countries: Chad, Bangladesh at 1.7

United States: 17th, at 7.6 Mainland China: 58th, at 3.2

ANTICORRUPTION ENFORCEMENT, 1979–2000

0

10,000

20,000

30,000

40,000

50,000

60,000

1979 81 83 85 87 89 91 93 95 97 99Year

All cases Cases involving big sums

Trend line without 1980s campaigns

WIDESPREAD CORRUPTION AS AN EQUILIBRIUM

How beliefs sustain widespread corruption Lower transaction costs Lower psychic costs Lower voluntary enforcement by ordinary citizens

Safety in numbers

Anticorruption policy problem Reducing corrupt payoffs Changing beliefs, the “folklore of corruption”

ANTICORRUPTION: AGENCY DESIGN

Two agencies Communist party discipline inspection committees Government procuratorates

Overlapping jurisdictions Procuratorates: criminal corruption Party agencies: all misconduct by party members, include

crimes

Party agency first-move advantage Hoarding or appropriation of criminal cases by party agencies Milder party penalties substitute for harsher criminal

punishments

ANTICORRUPTION CAMPAIGNS

1982, 1986, 1989: corruption overall1993, 1995: big sums and senior officials

Campaigns as “announcements”

To communist party committees Increase cases of criminal corruption investigated

To ordinary citizens Report corruption

To the corrupt Surrender, confess, rat on accomplices

ENFORCEMENT PEAKS IN CAMPAIGNS

0

10,000

20,000

30,000

40,000

50,000

60,000

1979 81 83 85 87 89 91 93 95 97 99Year

All cases Cases involving big sums

Trend line without 1980s campaigns

RESULTS OF ANTICORRUPTION CAMPAIGNS

Enforcement peaks: 1980s, not 1990s Reporting peaks Confession peaks

but

Ineffective deterrence No overall trend of increased reporting

Failure of enforcement, due especially to failure of agency design

OTHER DESIGN CHALLENGES

Institutional design: restructuring incentives Only in recent years

Constitutional design: constraints on power An ever more adaptive communist party?