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Table 4.1 shows that the scope of corruption (the type of officials involved) has expanded greatly. Compared with the early 1990s, when high-ranking officials (at county level or above, according to the official definition) were implicated in about 2 percent of all cases, the share of prosecuted corruption cases involving high-ranking officials rose threefold in a twelve-year period. The number of high-ranking officials prosecuted annually more than doubled during the same period. The effects of corruption perpetrated by high-ranking officials are far more insidious than that by junior officials. Obviously, because high-ranking officials serve as agents monitoring the behavior of junior agents, corrupt high-ranking officials can hardly be relied on to perform this function effectively. Worse still, their venal habits are likely to inspire their subordinates to engage in similar corrupt activities, thus multiplying the effects of corruption.

Table 4.1. Increase in Major Corruption Cases, 1990-2002a

Sources: ZGFLNJ,various years.

The phenomenon of a corrupt top local official, or yibashou (number-one leader), merits special attention. According to the decentralized predatory state perspective, predation becomes effectively decentralized when local strongmen choose to appropriate to themselves the power of higher public authorities and monopolize the extraction of revenues, even though such action is illegal. To be sure, few Chinese yibashous could formally appropriate the state’s fiscal power, but their nearly unchallenged political authority inside their jurisdictions—and their abuse of such authority—grant them probably most of the prerogatives of an independent political monopolist. During the 1980s, domineering and corrupt yibashous were relatively rare. But since the early 1990s, the power of yibashous has expanded considerably, mainly because the CCP failed to implement reforms to make the party itself more democratic. In a survey of 11,586 party members in Sichuan province in 1999, one-third said that their local party bosses monopolized decision making.5 The concentration of power in local strongmen has led to a rapid increase in the number of corrupt yibashous. From 1993 to 2003 in Henan province, for instance, the provincial procuratorate investigated and punished 4,123 yibashous for corruption, accounting for 12 percent of all the embezzlement and bribery cases prosecuted in the period. About 40 percent of these corrupt yibashous were chief executives of SOEs, and 30 percent were grassroots-level rural cadres. Such local and departmental independent monopolists appeared to have grown more rapacious as well. In Henan province, yibashous were implicated in 52 percent of the daans (major corruption cases measured in terms of money involved) in 1999; in 2003, they were involved in 75 percent of the daans.6In the infamous Shenyang case, 17 yibashous, including the mayor and the heads of the city’s intermediate court, procuratorate, construction commission, finance bureau, state asset bureau, tax bureau, and price bureau, were convicted of corrupt activities, including protecting a local mafia boss.7

The Growing Size of the Chinese State

The size of the state is the primary determinant of the degree of state predation. Larger states require more revenue for self-sustenance. As a rule, larger states are expected to have higher levels of corruption because they employ more agents and thus have more serious agency problems (it is more difficult to monitor and police large numbers of agents). Estimating the size of the Chinese state, however, presents a difficult challenge for two reasons. First, the official data regarding the number of state employees are hardly reliable and tend to underreport their numbers. Second, the truc costs of maintaining the Chinese state are almost impossible to measure.

One of the ways to measure the size of the state is to count the number of agents employed by the state. By this standard, the Chinese state