China's Trapped Transition_ The Limits of Developmental Autocracy - Minxin Pei [139]
74 Olson, “Dictatorship, Democracy, and Development.”
75 North, for example, saw agency costs as a serious constraint on the ruler’s ability to take full advantage of his monopolist position. Eggertsson, Economic Behaviorand Institutions, 324.
76 Andrei Shleifer and Robert Vishny, “Corruption,” The Quarterly Journal of Economics 58(3) (1993): 599-617.
77 The theoretical distinction between predation and corruption can be hopelessly blurred in reality because of the agency problem. A fully disciplinary predatory state does not exist in practice. Diversion of revenues collected in the name of the state into the pockets of the agents is a common form of corruption. In theory, the degree of corruption in a predatory state heavily depends on the degree of centralization. In more centralized predatory state in which agents are tightly monitored, there should be less corruption or loss of the state’s revenue.
78 See Paul Seabright, “Accountability and Decentralisation in Government : An Incomplete Contracts Model,” European Economic Review 40 (1996): 61-75; Emanuela Carbonara, “Corruption and Decentralization,” Universita di Bologna Dipartimento di Scienze Economiche WP 342/83, www.spbo.unibo.it/gopher/DSEC/vecchindex.htm.
79 David Wildasin, “Comments on ‘Fiscal Federalism and Decentralization: A Review of Some Efficiency and Macroeconomic Aspects,‘” in M. Bruno and B. Pleskovic, eds., Annual World Conference on Development Economics, 1995 (Washington, D.C.: World Bank, 1996).
80 Van Rijckcghcm and Beatrice Weder, “Corruption and the Rate of Temptation : Do Low Wages in the Civil Service Cause Corruption?” IMF WorkingPaperWP /97/73(Washington, D.C.: IMF, 1997).
81 Vito Tanzi, “Corruption, Arm’s Length Relationships, and Markets,” in Gianluca Fiorentini and Sam Peltzman, eds., The Economicsof Organized Crime(Cambridge: Cambridge University Press, 1995), 161-180.
82 Shleifer and Vishny made this argument in “Corruption”; see also Olivier Blanchard and Andrei Shleifer, “Federalism with and without Political Centralization: China Versus Russia,” NBER WorkingPaperNo. 7616, wwv.nber.org/papers/w7616.
83 Carbonara and Seabright assume that local officials are constrained by the monitoring of civil society and an independent judiciary. In fact, Gurgur and Shah acknowledged that decentralization without strong judicial and political control mechanisms will lead to increased corruption.
84 Hellman, “Winners Take All,” 203-234.
85 Michael McFaul, “State Power, Institutional Change, and the Politics of Privatization in Russia,” World Politics 47(2) (1995): 210-243; Federico Varese, “The Transition to the Market and Corruption in Post-socialist Russia,” Political Studies 45(3) (1997): 579-596.
86 Steven Solnick, “The Breakdown of Hierarchies in the Soviet Union and China: A Neoinstitutional Perspective,” World Politics 48(2) (1996): 209-238.
87 See United Nations, Human Development Report 1994 (New York: Oxford University Press, 1994).
88 Hellman, “Winners Take All.” Also see Joel Hellman, Geraint Jones, Daniel Kaufmann, and Mark Schankerman, “Measuring Governance, Corruption, and State Capture,” WorldBank Policy Research WorkingPaper No. 2312 (Washington, D.C.: World Bank, 2000); Asc Brodcland, Tatyana Koshechkina, and William Miller, “Foolish to Give and Yet More Foolish Not to Take—In-depth Interviews with Post-communist Citizens on Their Everyday Use of Bribes and Contacts,” Europe-Asia Studies 50(4) (1998): 651-677.
89 See János Kornai, The Political Economyof State Socialism(Princeton, N.J.: Princeton University Press, 1990).
90 For a study of asset-stripping by state agents in China, see X. L. Ding, “The Illicit Asset Stripping of Chinese State Firms,” The ChinaJournal43 (2000):1-28.
91 Ibid.
92 X. L. Ding’s investigation shows that Chinese managers have diverted a significant amount of state wealth into private overseas holdings. See Ding, “Informal Privatization Through Internationalization: The Rise of Nomenklatura Capitalism in China’s Offshore Businesses,” British Journal