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The Causes of Corruption: Evidence from China

  • Bin Dong

    (The School of Economics and Finance, Queensland University of Technology)

  • Benno Torgler

    (The School of Economics and Finance, Queensland University of Technology, CREMA – Center for Research in Economics, Management and the Arts and CESifo)

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    In this study we explore in detail the causes of corruption in China using two different sets of data at the regional level (provinces and cities). We observe that regions with more anti-corruption efforts, histories of British rule, higher openness, more access to media and relatively higher wages of government employees are markedly less corrupt; while social heterogeneity, regulation, abundance of resource and state-owned enterprises substantially breed regional corruption. Moreover, fiscal decentralization is discovered to depress corruption significantly, while administrative decentralization fosters local corruption. We also find that there is currently a positive relationship between corruption and economic development in China that is mainly driven by the transition to a market economy.

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    Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.72.

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    Date of creation: Jun 2010
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    Handle: RePEc:fem:femwpa:2010.72
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