Leviathan's Paradox? Bureaucrats and the Fight Against Corruption in China

Abstract

This dissertation revisits the classic question of how to best monitor the bureaucracy. Canonical theories of bureaucracy demonstrate the need for enhanced monitoring in government hierarchies. I argue that intensive top-down monitoring may reduce the productivity of bureaucrats by frightening them away from the informal practices that they would otherwise rely on when completing daily tasks. I formalize such a logic in a game-theoretic model. Utilizing a unique dataset of sub-provincial inspections in China's recent anti-corruption campaign, I identify this ``chilling effect'' by exploiting variation in the timing of inspections from 2012 to 2017. I show that these anti-corruption activities lower the area of land development projects proposed by bureaucrats. Causal mediation analyses with investigation data and original measures of corruption potential reveal that these effects are unlikely driven by reduction of actual corruption. Extension analyses suggest similar consequences on revenue collection and environmental regulation. Although scholars of state-building equate low corruption with effective bureaucracy, these findings present a paradox where intensive state-led efforts to lower corruption may further undermine bureaucrats' productivity. Furthermore, using an original survey nearly representative of urban Chinese residents, I provide additional support for the theory by showing that residents exposed to anti-corruption inspections become more tolerant of corrupt but competent bureaucrats. Importantly, my survey also reveals that, despite declines in bureaucrats’ productivity, anti-corruption efforts in China still improve Chinese citizens’ political support of the regime. This result suggests a reason why the regime chooses to let the campaign persist despite mounting concerns from the bureaucracy. Overall, this dissertation advances our understanding about anti-corruption efforts, state-building, and microdynamics of the bureaucracy.