Double Paradox

H. Wedeman Andrew

Description

According to conventional wisdom, rising corruption reduces economic growth. And yet, between 1978 and 2010, even as officials were looting state coffers, extorting bribes, raking in kickbacks, and scraping off rents at unprecedented rates, the Chinese economy grew at an average annual rate of 9 percent. In Double Paradox, Andrew Wedeman seeks to explain why the Chinese economy performed so well despite widespread corruption at almost kleptocratic levels.Wedeman finds that the Chinese economy was able to survive predatory corruption because corruption did not explode until after economic reforms had unleashed dynamic growth. To a considerable extent corruption was also a by-product of the transfer of undervalued assets from the state to the emerging private and corporate sectors and a scramble to capture the windfall profits created by their transfer. Perhaps most critically, an anti-corruption campaign, however flawed, has proved sufficient to prevent corruption from spiraling out of control. Drawing on more than three decades of data from China-as well as examples of the interplay between corruption and growth in South Korea, Taiwan, Equatorial Guinea, and other nations in Africa and the Caribbean-Wedeman cautions that rapid growth requires not only ongoing and improved anticorruption efforts but also consolidated and strengthened property rights.

Sujets

• Political economy

Informations

• Publié par: Cornell University Press
• Date de parution: 15 mars 2012
• Nombre de lectures: 0
• EAN13: 9780801464270
• Langue: English
• Poids de l'ouvrage: 2 Mo

Extrait

DOUBLE PARADOX

DOUBLE PARADOX Rapid Growth and Rising Corruption in China

CORNELL UNIVERSITY PRESS

Andrew Wedeman

ITHACA AND LONDON

Copyright © 2012 by Cornell University

All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850.

First published 2012 by Cornell University Press First printing, Cornell Paperbacks, 2012 Printed in the United States of America

Library of Congress CataloginginPublication Data Wedeman, Andrew Hall, 1958–  Double paradox : rapid growth and rising corruption in China / Andrew Wedeman.  p. cm.  Includes bibliographical references and index.  ISBN 9780801450464 (cloth : alk. paper)  ISBN 9780801477768 (pbk. : alk. paper)  1. Corruption—China. 2. Political corruption—China. 3. Economic development—China. 4. China—Economic conditions—1949– I. Title.  JQ1509.5.C6W39 2012  364.1'3230951—dc23 2011037091

Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent possible in the publishing of its books. Such materials include vegetablebased, lowVOC inks and acidfree papers that are recycled, totally chlorinefree, or partly composed of nonwood fibers. For further informa tion, visit our website at www.cornellpress.cornell.edu.

Cloth printing Paperback printing

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To my daughter, Maggie Wedeman, and wife, Kelly Eaton, who have lived with this book for the past decade and a half.

Contents

Preface and Acknowledgments

1.  A Double Paradox 2.  Developmental Corruption 3.  Degenerative Corruption 4.  Sequencing and Corruption 5.  Systemic Transition and Corruption 6.  Anticorruption and Corruption 7.  Controlling Corruption and Sustaining Rapid Growth

Notes Index

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Preface and Acknowledgments

I began thinking about this book in the mid1990s after reading Paolo Mauro’s article “Corruption and Growth” wherein he demonstrated that the statistical correlation between corruption and growth was negative. At the time, Transpar ency International had just begun publishing its Corruption Perception Index. In light of Mauro’s work, I was struck by the fact that in 1996 China was ranked as the sixth most corrupt country in the world, and yet that year its growth rate was ten percent, which wasdown slightly from the past several years. At the time, moreover, evidence was coming out that, far from being paragons of hon est government, both Japan and South Korea had deep histories of corruption that involved not only lowlevel politicians but the leaders of their ruling parties. In 1996 I wrote an article comparing the political economy of corruption in Zaire, the Philippines, and South Korea. While looting by the Mobutu regime certainly destroyed the Zairian economy and systematic rent scraping by Marcos hollowed out the Philippine economy, I argued, in South Korea it appeared that corruption provided a way for the ruling party to cash in on rapid growth and so provided an incentive to promote economic development. Thereafter, I discov ered data on the number of party members punished by the various provincial wings of the Discipline Inspection Commission of the Chinese Communist Party (CCP), which prompted more questions. It appeared that provinces with the highest growth rates and reputations for being “one step ahead” in the adoption of economic reforms also were the provinces with the highest incidence of dis ciplinary actions. In that 1996 article, “Rotting from the Head Down,” I endeav ored to show that rather than being negatively correlated with corruption, growth rates were positively correlated with the incidence of corruption. The paper was roundly—and appropriately—rejected by the reviewers atCompara tive Politics,who pointed out how little I then understood about the complexity of trying to analyze the political economy of corruption and how to handle data on corruption in China. They did, however, suggest that there was perhaps something to the argument. It was a good question: whether rising corruption had affected growth rates in China in the manner suggest by Mauro, who had become part of a growing cadre of economists at institutions such as the World Bank, the International Monetary Fund, and the United States Agency for Inter national Development calling for a systematic attack on corruption as a way to promote growth in the developing world.

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