Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 4, 2023 erstellt
Beschreibung:
While anti-corruption policies are generally believed to be crucial for investment and economic growth, we argue that such policies may backfire by impairing local officials’ incentives to grow the economy in a society featuring weak formal institutions and a state-led development model where corruption naturally emerges as the side consequence. We substantiate this argument by studying the recent anti-corruption campaign in China. By exploiting the exogenous staggered downfall of city leaders’ political patrons, we document that cities with leaders connected to those investigated senior officials witness a significant decline in economic performance. The effect is driven by the slack performance in a series of government-led economic activities such as land development, public infrastructure investment, and business licensing. We provide evidence that local leaders with better economic performance would face worse career prospects after the fall of their patrons, which explains their less incentive to boost the economy