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How Natural Resources Affect Corruption in China

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  • Hong, Ji Yeon
  • Yang, Wenhui

Abstract

This study explores the effect of natural resource production on the corruption of local public officials in China. We introduce a novel, micro-level data set on the production of three major fuel resources in China—oil, natural gas, and coal (2000–2005)—and analyze alongside county-level statistics and individual-level survey data. Our analyses show that the effects of resource extraction on corruption vary substantially depending on the type of natural resources exploited. We find that coal production alone is robustly associated with corruption among local public officials in county governments. Moreover, citizens in coal-producing areas are more likely to perceive government officials as corrupt. We posit that the coal industry’s regulation-heavy and labor-intensive production process along with smaller firm sizes are the primary sources of this effect. Our findings suggest effective tackling of resource-related corruption requires careful attention to the type of resources and their link to local political economy.

Suggested Citation

  • Hong, Ji Yeon & Yang, Wenhui, 2024. "How Natural Resources Affect Corruption in China," World Development, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:wdevel:v:175:y:2024:i:c:s0305750x23002899
    DOI: 10.1016/j.worlddev.2023.106471
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    More about this item

    Keywords

    Natural resources; Resource curse; Corruption; Local government;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • N55 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Asia including Middle East
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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