Corruption Networks in China: An Institutional Analysis

Abstract

Rapid economic growth provides opportunities for institutionalising new forms of corruption and for re-enforcing existing networks of wealth extraction and illicit activities (Rose-Ackerman 1999). In China, since the late 1990s, there is evidence that economic growth has been accompanied by corruption of increasing severity, complexity, and scope (Gong 1997; Wedeman 2004; Guo 2008). One indication of this intensification of corruption is the high incidence of collective corruption in which a complex network of participants from different government departments, localities, and private sectors operate like a syndicate. These corrupt networks have in some cases developed into corruption on a grand scale involving very high-level officials and the establishment of corrupt empires. The chapter identifies three major politico-economic features leading to this form of corruption in China: • power concentration in a geographically and functionally fragmented authoritarian regime; • business-government collusion in a transitional economy; and • the prevalence of informal politics, especially the factional networks within the ruling party and the privatisation of public power by family members of government officials. These features are illustrated using the case of a former member of the Politburo Standing Committee (PSC) of the Chinese Communist Party (CCP), Zhou Yongkang, who is to date the highest official ever convicted of corruption.