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Incentives and corruption in chinese economic reform

  • Chengze Simon Fan
  • Herschel I. Grossman

This paper argues that, given the legacy of Chinese communism and its political structure, corruption, together with the threat of punishment for corruption and the selective enforcement of this threat, serves as a method of compensation that both satisfies the political objectives of the Communist Party and provides an effective inducement to local officials to promote economic reform.

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Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 4 (2001)
Issue (Month): 3 ()
Pages: 195-206

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Handle: RePEc:taf:jpolrf:v:4:y:2001:i:3:p:195-206
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  1. Blanchard, O & Kremer, M, 1996. "Disorganization," Working papers 96-30, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Acemoglu, Daron & Zilibotti, Fabrizio, 1999. " Information Accumulation in Development," Journal of Economic Growth, Springer, vol. 4(1), pages 5-38, March.
  3. Acemoglu, D & Zilibotti, F, 1996. "Agency Costs in the Process of Development," Papers 607, Stockholm - International Economic Studies.
  4. Gordon, Roger H & Li, David Daokui, 1997. "Taxes and Government Incentives: Eastern Europe vs. China," CEPR Discussion Papers 1657, C.E.P.R. Discussion Papers.
  5. Isaac Ehrlich & Francis T. Lui, 1999. "Bureaucratic Corruption and Endogenous Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S270-S293, December.
  6. Acemoglu, D. & Verdier, T., 1996. "Property Rights, Corruption and the Allocation of Talent: A General Equilibrium Approach," Working papers 96-5, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Chen, Kang & Jefferson, Gary H. & Singh, Inderjit, 1992. "Lessons from China's economic reform," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 201-225, June.
  9. repec:tpr:qjecon:v:112:y:1997:i:4:p:1289-1332 is not listed on IDEAS
  10. Lui, Francis T, 1985. "An Equilibrium Queuing Model of Bribery," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 760-81, August.
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