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Toward a clean government in China: does the budget reform provide a hope?

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Abstract

Fighting corruption has proven to be a difficult task in many countries. In this paper, using China as a case study, we argue that a properly designed budgetary institution helps remove many institutional incentives and opportunities for corruption in financial management and regulatory activities of the government. As a result of recent budget reforms, China’s anticorruption effort has shifted from its earlier emphasis on exhortation and periodic crackdowns, which have been found to be ineffective, to the more fundamental issues of institutional incentives and opportunities for corruption. We propose that one consequence of the budget reform is the hope that China’s effort to create a clean government will be advanced. However, there is still a long way to go since it will take time for the new budgetary system to be institutionalized.

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Notes

  1. Some recent studies concur on this. See Andrew Wedeman, “Anticorruption Campaigns and the Intensification of Corruption in China,” Journal of Contemporary China, 2005 (14: 42), 93–116 and Ting Gong, “Corruption and Local Governance: The Double Identity of Chinese Local Governments in Market Reform,” The Pacific Review, 2006 (19: 1), 85–102.

  2. For example, Aristotle wrote: “Some officials handle large sums of money: it is therefore necessary to have other officials to receive and examine the accounts.” Cited from Arigapudi Premchand, “Public Financial Accountability,” in Salvatore Schiavo-Campo (eds.), Governance, Corruption and Public Financial Management (Manila: Asian Development Bank, 1999), pp.148–149.

  3. Previous studies have found public officials confronted with economic hardships, such as low salary and delays in salary payment, are prone to corruption. See A. W. Goudie & David Stasavage, “A Framework for the Analysis of Corruption,” Crime, Law & Social Change, 1998 (29), 113–159 and Hung-en Sung, “A Convergence Approach to the Analysis of Political Corruption: A Cross-national Study,” Crime, Law & Social Change, 2002 (38), 137–160.

  4. For the SAS, see more in the discussion of treasury management reform in the next section.

  5. At the present time, not all expenditures are disbursed through the FDD system. Certain disbursements are carried out under the so-called “fiscal authorized disbursement” (FAD), in which bureaus, with the authorization of the finance bureau, can write an effective payment order to disburse monies from the treasury single account to receivers. See Jun Ma & Meili Niu. “Modernizing Public Budgeting and Financial Management in China,” in H. A. Frank (Eds.), Public Financial Management (New York: Taylor & Francis, 2006), pp. 691–736.

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Authors and Affiliations

  1. Center for Public Administration Research, School of Government, Sun Yat-sen University, Guangzhou, China

    Jun Ma & Xing Ni

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  1. Jun Ma
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  2. Xing Ni
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Correspondence to Jun Ma.

Additional information

This study is supported by Sun Yat-sen University 982–2 International Exchange Fund. The authors wish to thank Professor Ting Gong, Professor Stephen Ma, and Dr. Alfred Ho for their assistance and suggestions in editing and refining this essay. We are also grateful to Dr. Oliver M. Rui for his valuable comments. Lastly, we want to thank Dr. Andrew Wedeman for sending us his paper for reference.

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Ma, J., Ni, X. Toward a clean government in China: does the budget reform provide a hope?. Crime Law Soc Change 49, 119–138 (2008). https://doi.org/10.1007/s10611-008-9101-0

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