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Regulation and corruption in transitional China

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  • Xiaobing Wang

Abstract

This paper addresses the relationship between institutional change, regulation, and corruption by examining two possible positive effects of government discretion on growth in transitional economies, such as China. Firstly, economic reform depends on the support of those who have economic power. Allowing government departments and officials to divert resources and to be involved in private businesses make them a driving force for reform by giving up some of their power to the market. Secondly, because there existed large amounts of inefficient or out-of-date regulations in transitional economies, certain types of government discretion can actually circumvent inefficient policies and regulations and thus support growth. They enable people to break the status quo when regulations are lagging behind the reform. Although China had many laws and regulations which did not particularly promote growth, positive effects of government discretionary behaviour may have offset the negative effects of these laws and regulations on growth.

Suggested Citation

  • Xiaobing Wang, 2019. "Regulation and corruption in transitional China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 17(1), pages 47-64, January.
    • Handle: RePEc:taf:jocebs:v:17:y:2019:i:1:p:47-64
    DOI: 10.1080/14765284.2019.1588594
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    Cited by:

    1. Cheng, Cheng & Wang, Xiaobing, 2021. "Transportation cost reducing technological change and wages inequalities," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 600-611.
    2. Dong, Zhiqiang & Wang, Xiaobing & Zhang, Tianhua & Zhong, Yuejun, 2022. "The effects of local government leadership turnover on entrepreneurial behavior," China Economic Review, Elsevier, vol. 71(C).
    3. Nanak Kakwani & Xiaobing Wang & Ning Xue & Peng Zhan, 2022. "Growth and Common Prosperity in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(1), pages 28-57, January.
    4. Anne Villamil & Xiaobing Wang & Ning Xue, 2021. "A political foundation of public investment and welfare spending," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(4), pages 660-690, August.

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