Anticorruption and Growth: Evidence from China

Guangjun Qu, Kevin Sylwester and Feng Wang

MPRA Paper from University Library of Munich, Germany

Abstract: Many studies have examined corruption’s effect upon economic growth. This study takes a different approach and investigates whether anticorruption campaigns might also lower economic growth, at least in the short run. We focus upon the anticorruption campaigns run by the Communist Party of China in recent years. To measure the intensity of the Party’s anticorruption efforts, we count the number of articles from official newspapers that discuss corruption or anticorruption policies. These official Chinese newspapers are controlled by the Party as its mouthpieces and the inclusion of articles and editorials in these papers only appear with official approval. Therefore, the frequency of corruption and anticorruption articles within these papers provides information for how seriously the Party views corruption and how strenuously the Party is fighting it. We first analyze the patterns of the anticorruption campaigns across provinces and over time while also comparing our measure with other measures of corruption and anticorruption. Using data from Chinese provinces, we then estimate the effect of anticorruption upon economic growth. We employ fixed effects models and find a negative effect from anticorruption upon economic growth. Concerned that economic growth could impact the intensity of anticorruption campaigns, we utilize dynamic GMM estimation methodologies and also propose an external instrument for our anticorruption proxy. Results remained robust. Finally, we measure the effects of anticorruption not by our newspaper proxies but by looking at growth effects during and after the sentencing of high ranking government officials on corruption charges. Economic growth is once again found to be lower. Moreover, this negative effect appears to last for two years. Our findings do not imply that governments should not try to lower corruption, but do suggest a cost of doing so.

Keywords: Anticorruption; Official Newspapers; China; Corruption; Growth (search for similar items in EconPapers)
JEL-codes: H11 K42 O11 O43 (search for similar items in EconPapers)
Date: 2016-03-02
New Economics Papers: this item is included in nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/72190/1/MPRA_paper_72190.pdf original version (application/pdf)

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:pra:mprapa:72190

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().