Research Insights

To catch tigers or to catch flies, that's the problem

By Prof. Kim Sau Chung

Many hailed the recent anti-corruption campaign in China. Not only "small flies" were caught, they observed, even an ex-member of the Politburo Standing Committee, who used to enjoy criminal immunity, was held accountable for his behaviour as well. The more accountability, the better, as the conventional wisdom goes. But the political logic in non-democracies can be more nuanced than that in democracies, cautions HKBU's Professor Kim-Sau CHUNG, and can sometimes defy conventional wisdom.

In a recent article published on the Journal of Public Economics, Professor Chung and his coauthors explain that China's political system, where future leaders are selected by incumbent leaders instead of by citizens at large, is naturally symbiotic with criminal immunity on the part of retired leaders. Immunity allows incumbent leaders, regardless of whether they are corrupt or clean, to select clean successors without fear. Without immunity, corrupt incumbent leaders would have much stronger incentives to select corrupt successors instead. Such successors, having skeletons in their own closets, are less gungho in investigating corruption, and hence less likely to inadvertently implicate their predecessors. Of course, such successors would tend to select corrupt successors as well, and we are stuck in a vicious cycle.

More generally, Professor Chung and his coauthors point out, being tough on corruption at every level of the government hierarchy simply does not sit well with China's current political system. Going easy with corruption at the top of the government is the necessary price to pay if China wants to get tough on corruption at the bottom. Symmetrically, If China wants to get tough at the top, they will need to go easy at the bottom. Which one is better depends on whether corruption at the top or at the bottom is more damaging. No wonder why, as the Xi administration centralises power to the top, they also decide that getting tough on corruption at the top is better.

Reference:

Che, J., Chung, K., & Qiao, X. (2019). The king can do no wrong: On the criminal immunity of leaders. Journal of Public Economics, 170, 15-26.