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Does Increased Civil Service Pay Deter Corruption? Evidence from China

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  • Gong, Ting
  • Wu, Alfred M.

Abstract

The temporal persistence and geographical prevalence of corruption in the world have provoked a vast amount of research into its causes. Low civil service remuneration, especially in less developed nations, is believed to be an important contributing factor to corruption. The assumption is that when salaries are low but expectations for service remains high, government officials may demand more compensation from informal or even illegal channels than what is officially sanctioned; hence, corruption arises. Accordingly, increased pay level is assumed to be effective in deterring corruption.Using China as a case, we argue that the relationship between civil service pay and corruption is not as simple as suggested. The empirical evidence gathered from China casts doubt on the assumed connection between the two to debunk the myth that increasing civil service pay contributes to the control of corruption. The article also presents the policy implications of the above analysis for human resource management and civil service governance.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41815.

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Date of creation: 2012
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Publication status: Published in Review of Public Personnel Administration 2.32(2012): pp. 192-204
Handle: RePEc:pra:mprapa:41815

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Keywords: corruption; civil service pay; efficiency wage model; relative deprivation theory;

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  1. Vito Tanzi, 1994. "Corruption, Governmental Activities, and Markets," IMF Working Papers 94/99, International Monetary Fund.
  2. Jonathan S. Leonard, 1987. "Carrots and Sticks: Pay, Supervision and Turnover," NBER Working Papers 2176, National Bureau of Economic Research, Inc.
  3. Brian Kulik & Michael O’Fallon & Manjula Salimath, 2008. "Do Competitive Environments Lead to the Rise and Spread of Unethical Behavior? Parallels from Enron," Journal of Business Ethics, Springer, vol. 83(4), pages 703-723, December.
  4. Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
  5. Klaus Abbink, 2000. "Fair Salaries and the Moral Costs of Corruption," Bonn Econ Discussion Papers bgse1_2000, University of Bonn, Germany.
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