Filling the gap of formal institutions: the effects of Guanxi network on corruption in reform-era China

摘要

Corruption exists around the world and throughout the human history, but societies undergoing rapid modernization and institutional transition tend to be more susceptible to this problem. This article analyzes the corruption-facilitating roles of guanxi network under transition. It argues that when deficient political and economic institutions hamper the effective flow of information and resources and when fast structural changes generate uncertainty, people can resort to guanxi network, an informal institution, to overcome these difficulties and advance their private interests. Using empirical evidence from reform-era China, this article demonstrates how the communication, exchange, and normative functions of guanxi network enhance the opportunities, means, and incentives for public officials to engage in corruption, especially transactional corruption through particularistic ties.