
Contents
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1. Explaining Corruption in Chinese Society—A Theoretical Model 1. Explaining Corruption in Chinese Society—A Theoretical Model
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1.1. Similar Firms 1.1. Similar Firms
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1.2. Differentiated Firms 1.2. Differentiated Firms
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2. Corruption and Its Correlates in China 2. Corruption and Its Correlates in China
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2.1. Causes of Corruption 2.1. Causes of Corruption
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Reliance on Social Connections Increases Corruption Reliance on Social Connections Increases Corruption
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Prevalence of Regulation Breeds Corruption Prevalence of Regulation Breeds Corruption
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Disadvantage in Initial Social Capital Intensifies the Need for Corruption Disadvantage in Initial Social Capital Intensifies the Need for Corruption
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Economic Growth Engenders More Corruption Economic Growth Engenders More Corruption
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Penalty Reduces Corruption but has Limitations Penalty Reduces Corruption but has Limitations
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2.2. Challenges in Fighting Corruption and Potential Effects of Anticorruption Measures 2.2. Challenges in Fighting Corruption and Potential Effects of Anticorruption Measures
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3. Causes and Effects of Corruption in China: Empirical Evidence 3. Causes and Effects of Corruption in China: Empirical Evidence
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3.1. Factors Determining the Level of Corruption 3.1. Factors Determining the Level of Corruption
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3.2. Effects of the Anticorruption Campaign 3.2. Effects of the Anticorruption Campaign
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4. Challenges in Fighting Corruption in Transition Economies 4. Challenges in Fighting Corruption in Transition Economies
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Notes Notes
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References References
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3 Fighting Corruption in China: The Roles of Formal and Informal Institutions
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Published:August 2021
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Abstract
This chapter investigates law and economics in contemporary China. Under Xi Jinping, there has been a bigger effort to control corruption than has been witnessed in a very long time in China. More government officials were arrested on charges of corruption during the four years preceding 2018 than in the four decades before that. However, the number of arrests in itself cannot automatically be treated as an indicator of success. In countries with complex laws and regulations, where virtually everybody, knowingly or unwittingly, infringes some laws, corruption control can easily become an instrument for silencing dissent and opposition. There is the further problem of corruption control damaging legitimate business and trade, because people become overly cautious and desist from making decisions. This can drive some of the corrupt activities deeper underground and create the illusion of greater success than is warranted. It can also slow down growth.
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