Crony capitalism, the party-state, and the political boundaries of corruption

Weijia Li, Gérard Roland and Yang Xie

Journal of Comparative Economics, 2022, vol. 50, issue 3, 652-667

Abstract: We build a model that puts together crony capitalism, the hierarchy of the Chinese communist party-state, and the decision-making process inside the Party Center. We show that inefficient economic institutions create local corruption that raises realized productivity, while generating rents that flow along the party-state hierarchy up to the provincial level, threatening the Center’s control in potential crises. Although both stronger crisis control and higher economic performance help the Center’s goal to stay in power, we show that given a general fat-tailed risk of crisis, the Center will maximize crisis control at the expense of the economy when choosing its tolerance of local corruption. Power structure and corruption within the Center and reciprocal accountability between central and provincial leaders are also analyzed. Our analysis suggests conditions under which China’s communist regime will or will not deal with the existential threat presented by corruption.

Keywords: Autocracy; Corruption control; State apparatus; Reciprocal accountability; Chinese Communist Party (search for similar items in EconPapers)
JEL-codes: D73 H12 H77 O53 P30 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0147596722000178
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:50:y:2022:i:3:p:652-667

DOI: 10.1016/j.jce.2022.02.002

Access Statistics for this article

Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland

More articles in Journal of Comparative Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().