Here’s an interesting map. It’s extracted from the paper I’m highlighting this week and shows China’s provinces and how anti-corruption campaigns have ebbed and flowed most frequently from 2000 to 2014 (darker = more campaigns). I’ll come back to it later.
Guanjun Qu, Kevin Sylwester and Feng Wang from the Birmingham Southern College, Southern Illinois University and Chongqing Universities respectively set out to reverse the old question does corruption impede economic growth? They wondered if anti-corruption efforts might also retard progress?
They chose China to test their notion as not only has China made regular efforts, of varying intensity, to tackle the problem but also because China provides a reliable indicator in how intense the campaigns are via press reports.
It’s possible now to machine read the China Daily and it’s regional affiliates from 2000 and so that’s what the team did (up to 2014). They tracked articles looking for the word ‘corruption’ (腐败) and from this were able to create a gauge to regress subsequent economic performance on.
Yes, anti-corruption cycles in China have had a measurable negative effect on economic performance subsequently. The effect is especially pronounced in a locale when a local big-man (it’s nearly always a man) has been taken down. They observe a 0.7% fall in per capita GDP in the year a local grandee is sentenced and a 1% per capita GDP contraction in the year a senior bent official is convicted.
They’re careful to point out that one shouldn’t conclude that anti-corruption activity is a bad thing. Just that governments (they believe their results probably hold outside of China too) should be aware there are short term costs that have to be considered when mounting such campaigns.
Back to the map. They also note that border provinces and those with a high proportion of ethnic minorities are rarely troubled by these campaigns. Their guess, that these areas are sensitive so there’s no point in poking wasp-nests unnecessarily, makes intuitive sense.
The implicit message then to bandits of all hues would therefore seem to be Go West!
You can access the paper in full via the following link Anticorruption and Growth.
Happy Sunday