No 'how-to' book from the West can curb corruption in China

Eric Li says the roots of corruption are unique everywhere and, in China, it stems from a disconnect between political authority based on a selfless moral claim and economic realities

PUBLISHED : Tuesday, 13 August, 2013, 12:00am
UPDATED : Friday, 31 October, 2014, 7:50pm

China's new leader, Xi Jinping , has identified corruption as an existential threat to the party-state. Many political commentators proclaim that corruption is inherent to China's one-party system and cannot be contained without fundamental change. Perhaps it is time to examine corruption in the larger historic and intellectual context.

Contemporary corruption has been a subject of global attention for 20 years. Before that, ideologies shielded rampant corruption. Marcos and Suharto were protected by the Western alliance. Since then, the research has been vast, but what have we learned?

A global consensus on corruption was formed early on, without empirical data: corruption results from incomplete economic liberalisation, the lack of political competition, an independent judiciary or press freedom, and weak civil society. Measurement systems were developed to produce single-dimension indexes in which corruption is qualitatively the same everywhere and varies only in quantity.

Transparency International's Corruption Perception Index is the most authoritative among them. Since the causes are the same and the degree measurable, it was only natural to issue standardised prescriptions, namely, privatisation, multi-party elections, an independent judiciary, press freedom, and a strong civil society.

Like "how-to-get-rich" books, many "how-to" books were published, such as USAid's Handbook for Fighting Corruption, the World Bank's Helping Countries Combat Corruption and the United Nations Development Programme's Corruption and Good Governance. But like their commercial cousins, there was only one problem: they didn't work.

Post-Suharto Indonesia implemented all the prescriptions in the "how-to" books. Some 60 political parties were formed for elections, the press was set free, judges became independent, and companies privatised. Yet corruption got worse. In the words of academic Andrew MacIntyre, Indonesia went from "one Suharto to hundreds of little Suhartos". Examples like this abound in the developing world.

Leading scholars have realised that corruption is complex and multi-dimensional; its effects vary qualitatively and are nearly impossible to measure.

Corruption is the abuse of public trust for private benefits. However, the distinction between public and private varies between economies. In the developed West, boundaries between public and private have been defined for decades, even centuries. In a transitioning economy like China, the line is constantly shifting.

Corruption is multi-dimensional. Political scientist and author Michael Johnston studied "influence market corruption" - rampant in developed democracies. It is legalised corruption in the forms of political contributions, lobbying, and revolving doors.

For China, the existing institution of the party is the most viable vehicle to contain corruption

The US ranks high in the Transparency International index, but 77 per cent of Americans say officials are influenced by financial contributors vs 19 per cent who say they are led by the country's best interests (Gallup); 59 per cent say elections are for sale; 70 per cent say the political system is controlled by special interests ( Newsweek); and 93 per cent say politicians do favours for campaign contributors (ABC News and The Washington Post). These numbers clearly represent perception of severe corruption. Yet US practices are legal and are never counted by ranking systems.

Every Chinese dynasty had corruption. But the root causes were unique. One was embedded in the DNA of the Confucian Mandarin class - shi da fu - the centuries-old non-hereditary ruling bureaucracy. The shi da fu class is defined by its moral claim of selfless devotion to the people - "first in worrying about the world's troubles and last in enjoying its pleasures". The Chinese people expect this moral standard of the ruling bureaucracy. But Confucius also used the term xiaokang to describe an orderly society with comfortable means, and this included the bureaucrats. These two concepts have been in conflict in Chinese officialdom for centuries.

We recall the story of Hai Rui, the corruption-fighting minister in the Ming dynasty, during which officials' salaries were the lowest, anti-corruption campaigns were the fiercest, yet the level of corruption remained as stubbornly high as ever. Hai Rui, whose meagre government salary could barely support his family, was said to eat meat only once a year on his mother's birthday. This disconnect between political authority based on a selfless moral claim and economic realities is at the core of persistent official corruption. A rich person's dinner could cost more than the entire monthly salary of Wang Qishan , the party's anti-corruption tsar.

During the first 30 years of the People's Republic, corruption was insignificant because nearly everything was public. Corruption increased with market reforms. The party inherited the moral claims of the Mandarin class, while building a vibrant xiaokang society; its officials are faced with the choice of being saints or thieves.

Given this deeply rooted cultural tradition, neither Singapore's highly paid bureaucracy nor America's revolving-door approach could gain legitimacy with the Chinese public. Here lies the dilemma, and no "how-to" books offer a solution.

The causes of corruption vary across different countries and solutions should consider existing institutional characteristics and cultural backgrounds. For China, the existing institution of the party is the most viable vehicle to contain corruption and should be strengthened. If the country were to adopt the checks and balances provided by the division of political power into three branches, as advocated by some, the result could very well be the current quantity of corruption times three.

Since Bo's downfall, many ministers and mayors have been arrested. Many more live in fear of being caught eating at fancy banquets or wearing an expensive wristwatch. Some say the campaign-style anti-corruption drive attacks the symptoms but does not cure the disease. But the current campaign is so harsh that it will probably reduce corruption significantly.

Yes, corruption will come back and another campaign might be required - not an ideal approach, but better than theoretical solutions that flop in reality.

While the inherent shi da fu conflict deepens corruption in a down cycle, the Mandarin ethos and the party's instinct for self-preservation could combine to check corruption in an up cycle. China seems to be in such an up cycle now.

The saints are on the march and the thieves are in retreat.

Eric X. Li is a venture capitalist and political scientist in Shanghai. This is an excerpt from a recent speech given at an anti-corruption conference organised by the European Economic and Social Committee in Brussels