政治體系與貪污：台灣與中國大陸案件之比較探討 - 政大學術集成

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(1)國立政治大學亞太研究英語碩士學位學程 International Master’s Program in Asia-Pacific Studies College of Social Sciences National Chengchi University 碩士論文 Master’s Thesis. 立. 政治大. ‧. ‧ 國. 學. 政治體系與貪污：台灣與中國大陸案件之比較探討 Political Regime Types and Corruption: A Comparative Perspective on the Cases of Taiwan and the PRC. io. sit. y. Nat. n. er. Student: a l Jeroen van der Lee (李哲安) i(v蔡中民) Advisor: Prof. n C Chung-min Tsai U. hengchi. 中華民國 103 年 7 月 July 2014.

(2) 政治體系與貪污：台灣與中國大陸案件之比較探討 Political Regime Types and Corruption: A Comparative Perspective on the Cases of Taiwan and the PRC 研究生：李哲安指導教授：蔡中民. Student: Jeroen van der Lee Advisor: Chung-min Tsai. 國立政治大學. 政治大. 亞太研究英語碩士學位學程. 立. 碩士論文. ‧. ‧ 國. 學 A Thesis. y. Nat. er. io. sit. Submitted to International Master’s Program in Asia-Pacific Studies National Chengchi University a. n. iv l C n U h e n gofcthe In partial fulfillment h i Requirement For the degree of Master in China Studies. 中華民國 103 年 7 月 July 2014.

(3) Table of Contents List of Figures .................................................................................................................................................. ii List of Tables ................................................................................................................................................... iii Abstract ............................................................................................................................................................. iv I. Introduction .................................................................................................................................................. 1 I.I Literature Review: Democracy and Corruption ................................................................................... 1 I.II Literature Review: China’s New Political Economy .......................................................................... 3 I.III Research Question ................................................................................................................................ 4 I.IV Literature Review: Contexts of Corruption ....................................................................................... 5. 治政 I.V Methodology .......................................................................................................................................... 13 大立. I.V Hypothesis ............................................................................................................................................. 11. ‧ 國. 學. II. Historical Literature Study of Taiwan’s Corruption Context ..................................................... 14 II.I Corruption in Taiwan ........................................................................................................................... 17. ‧. II.II Anti-Corruption Measures in Taiwan .............................................................................................. 19. y. Nat. III. Historical Literature Study of the PRC’s Corruption Context ................................................. 30. sit. III.I Corruption in the PRC ....................................................................................................................... 32. al. er. io. III.II Anti-Corruption Measures in the PRC ........................................................................................... 41. n. iv n C IV. Quah Model Analysis of Taiwan and 45 h ethenPRC hi U g c.............................................................................. IV.I Causes and Curbs of Corruption in Taiwan .................................................................................... 46. IV.II Causes and Curbs of Corruption in the PRC ................................................................................ 59 V. Comparison and Discussion................................................................................................................. 68 V.I Comparison............................................................................................................................................ 69 V.II Discussion ............................................................................................................................................ 74 VI. Conclusion ............................................................................................................................................... 78 VII. References .............................................................................................................................................. 82 i.

(4) List of Figures Figure 1: TI’s Corruption Perception Index of Taiwan (1995-2013) ....................................................... 17 Figure 2: Taiwan ACA Case Processing Flowchart .................................................................................... 26 Figure 3: TI’s Corruption Perception Index of the PRC (1995-2013) ..................................................... 32 Figure 4: Revealed Corruption Rate: Index of Economic Crime Cases Filed in the PRC (1980-2006) ............................................................................................................................................................................ 37 Figure 5: Average Crime-Capture Lag in Official Corruption Cases in the PRC (1992-6 and 2005-6) ............................................................................................................................................................................ 38 Figure 6: Persecution of Senior Officials and the Amount of Money Recovered Per Case in the PRC (1980-2006) ....................................................................................................................................................... 39. 政治大 Figure 8: Comparison of Civil Service 立 Pay and GDP per capita (yuan) in the PRC (1993-2007) .......61 Figure 7: PRC ACA Case Processing Flowchart ......................................................................................... 44. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. ii.

(5) List of Tables Table 1: TI’s Corruption Perception Index of Taiwan .............................................................................. 16 Table 2: Number of Offenses of Anti-Corruption Laws in Taiwan (2004-2008) .................................. 28 Table 3: TI’s Corruption Perception Index of the People’s Republic of China (1995-2013)............... 31 Table 4: World Bank’s Doing Business Survey: Taiwan’s Ranking in the World (2006-2014) .................. 49 Table 5: Taiwan’s Rankings in Doing Business Topics (2009 and 2014) .................................................... 50 Table 6: Judicial Results of Corruption Cases in Taiwan (1991-2002)..................................................... 51 Table 7: Judicial Results of Corruption Cases in Taiwan (Total of 2008-2012) ..................................... 52 Table 8: World Bank’s Doing Business Survey: China’s Ranking in the World (2006-2014) ..................... 62. 政治大 Table 10: Comparison of the Causes and Curbs of Corruption in Taiwan (Ma era) and the PRC (Xi 立 era)...................................................................................................................................................................... 68 Table 9: China’s Rankings in Doing Business Topics (2009 and 2014) ...................................................... 63. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. iii.

(6) Abstract Scholars of corruption have come to a general consensus on the relationship between democratization and corruption. They agree that due to institutional developments propelled by democratization, corruption will eventually be reduced. China has been able to develop without democracy. In this thesis I challenge the influence of political regime type on corruption. Is democracy really necessary for the reduction of corruption?. 治政大 I analyze both using a model cases of Taiwan, a democracy, and the PRC, an authoritarian country. 立. To find out the relationship between political regime type and contexts of corruption I compare the. for the analysis of the causes and curbs of corruption by Quah. By comparing the cases we find out. ‧ 國. 學. that they are similar in terms of the following factors that cause corruption: civil servant salaries and. ‧. culture. We also find out that they are different in the following: red tape and opportunities for corruption, risk of detection, and genuine political will to tackle corruption. Additionally, we find. y. Nat. io. sit. that China has a peculiar pattern of anti-corruption measures in that there are two sets of rules. n. al. er. governing the punishment of official malfeasance: the law and CCP Discipline. The latter can take precedence, thus creating an inequality in the rule of law.. Ch. engchi. i n U. v. Overall, we conclude that these differences can be attributed to the differences in political regime type. Thus, in terms of corruption, political regime type matters.. iv.

(7) I. Introduction In the last few years, political corruption has been a hot item in both Taiwan and Mainland China with the trial and conviction of numerous high level officials, like Liu Zhijun in China and Lin Yishih in Taiwan. Both cases clearly demonstrate the detrimental effects corruption can have on society. In the first case, the railway minister Liu Zhijun of the People’s Republic of China was sacked and sentenced to death this year. Misallocations of resources by him are judged to have. 政治大. caused the crash of a high-speed rail train in Wenzhou province in the same year, causing the deaths. 立. of 40 people. 1 The second case concerns the sentencing of secretary-general of the Executive Yuan. ‧ 國. 學. (the executive branch of the Taiwanese government) Lin Yi-shih. The official was convicted of demanding bribes from a construction company before allowing construction. This case shows how. ‧. corruption brings about economic inefficiency and unfairness among other negative effects on. Nat. sit. y. society. But how do we interpret these reports when assessing the development of anti-corruption. n. al. er. io. efforts? Are the governments’ anti-corruption efforts effective and are the bad guys increasingly. i n U. v. getting caught? Or is the increase in reports on officials’ malpractices signifying that the actual corruption rate is going up?. Ch. engchi. I.I Literature Review: Democracy and Corruption A large body of research, mostly based on data from third-wave democracies in the eighties, has indicated a relationship between corruption and democratization in the form of an inverted U-curve. Kaiman, Jonathan. "Liu Zhijun, China's Ex-railway Minister, Sentenced to Death for Corruption." The Guardian. 8 July 2013. Web. 8 November 2013. 1. 1.

(8) shaped trend. 2 As countries democratize corruption levels tend to rise until they reach a certain modernization threshold after which the levels of official malfeasance start to decline. Campbell and Saha argue that “if democracy can work effectively then it will have an inherent tendency to inhibit corruption.” 3 One underlying argument of this relationship between a democratic political regime and corruption is the public choice explanation of competition in economic and political arenas. Scholars of the Cold War era have argued that heavy government intervention in the economy provides government officials with opportunities for lucrative rent-seeking behavior. 4 Their studies were mostly implying. 政治大. authoritarian interventionism in the context of the Soviet Union. More recently, a study by Ades and. 立. Di Tella has shown that countries with industrial policies that promote ‘national champions’ have. ‧ 國. 學. seemingly higher levels of corruption. 5 This suggests a step away from a relationship between political regime type and corruption, and a step towards a more direct relationship between. ‧. economic policy and corruption.. Nat. sit. y. Regarding the political arena, democratic competition is seen to inhibit corruption “since [politicians]. n. al. er. io. cannot capture high bribes and yet must suffer the externality costs of policies passed by their. i n U. v. colleagues as well as corrupt behavior by bureaucrats, democratic politicians will be more likely than. Ch. engchi. authoritarian leaders to pass anti-corruption policies and to ensure that they are enforced.” 6. Campbell, Neil, and Shrabani Saha."Corruption, Democracy and Asia-Pacific Countries." Journal of the Asia Pacific Economy 18.2 (2013): 290-303. 3 Campbell, Saha. (2013): 290. 4 Tullock, Gordon, “The Welfare Costs of Tariffs, Monopolies and Theft”, Western Economic Journal, 5 (1967): 224–32; Krueger, Anne O., “The Political Economy of the Rent-seeking Society”, American Economic Review, 64 (1974): 291–303; Bhagwati, Jagdish N. "Directly unproductive, profit-seeking (DUP) activities." The journal of political economy (1982): 9881002. 5 Ades, Alberto, and Rafael Di Tella. "National Champions and Corruption: Some Unpleasant Interventionist Arithmetic." The Economic Journal 107.443 (1997): 1023-1042. 6 Montinola, Gabriella R., and Robert W. Jackman. "Sources of corruption: a cross-country study." British Journal of Political Science 32.1 (2002): 150. 2. 2.

(9) Especially the incentive of re-election is considered a mechanism through which political competition reduces corruption. 7 Montinola and Jackman add two more reasons why democratic competition reduces corruption. First of all, democracies are associated with freedom of information and association that helps in the monitoring of public officials. Additionally, the “possible turnover of power in democracies implies that politicians cannot always credibly promise that particular laws and regulations will continue in the future. This minimizes the size of bribes that rent-seekers are willing to pay.” 8 So in summary the current body of research claims that democracy inhibits corruption, because it. 政治大. implies economic and political competition and institutions that reduce incentives for corruption.. 立. Additionally, democracies traditionally have freedom of information and association that will allow. ‧ 國. 學. for more transparency.. ‧. I.II Literature Review: Modern China and Corruption. Nat. sit. y. The abovementioned body of research assumes that democracy inhibits corruption in comparison to. n. al. er. io. authoritarian governments like communist ones. More recently, with China’s rise appears a new,. i n U. v. difficult to define, political regime type that distinguishes itself from traditional authoritarianism.. Ch. engchi. These days it is problematic to call the People’s Republic of China (hereafter referred to as the PRC) a traditional communist country. It has opened up to the capitalist world market and its government has shown a conscious effort in anti-corruption. As shown by regular media reports, China’s corruption problems are very large in comparison to other advanced economies, and their war on corruption has not been easy.. Rasmusen, Eric, and J. Mark Ramseyer, “Cheap Bribes and the Corruption Ban: A Coordination Game Among Rational Legislators”, Public Choice, 78 (1994): 305–27. 8 Montinola, Jackman. (2002): 153. 7. 3.

(10) The political economy of China, however, is considerably different from that of other traditional authoritarian countries. We cannot assume that the Chinese Communist Party (hereafter referred to as the CCP) cannot successfully combat corruption without embracing democracy. Even without democracy, China does not lack competition in economic and political arenas. Since 1982, China has embraced capitalism and the world market. Although, there is no doubt that the CCP has a strong industrial policy that promotes ‘national champions’ like Sinopec and PetroChina, there are many private economic players that are slowly but surely growing, especially as credit becomes more available for private enterprises.. 政治大. Additionally, although the CCP has the monopoly on political power in the People’s Republic of. 立. China (hereafter referred to as the PRC), there has been evidence of political competition inside the. ‧ 國. 學. party between two ‘factions’ known as the princelings and the Communist Youth League, 9 with Xi Jinping of the former being the current ‘victor’ and leader of the CCP.. ‧. Finally, the previous conception that freedom of information is a right reserved for democracies. Nat. sit. y. seems to become less self-evident with the rise of online microblogging (Sina Weibo). 10 Regardless. n. al. er. io. of the CCP’s attempt to curb the dissemination of information through this internet age medium,. i n U. v. one post on Weibo has the ability to reach millions of people before it gets deleted by the censors.. Ch. engchi. All of the above lead me to believe that the rise of new China brings some previous assumptions about democratization being a precondition for successful anti-corruption into question. The modern day context of corruption needs a reassessment.. I.III Research Question. 9. Li, Cheng. "The Battle for China's Top Nine Leadership Posts." The Washington Quarterly 35.1 (2012): 131-145. "Micoblogs: Small Beginnings." The Economist 6 April 2013. Web. 18 Nov. 2013.. 10. 4.

(11) In this preliminary study on corruption I aim to answer the following research question. Does the political regime type influence a country’s corruption context? With the latter I mean the framework of causes and curbs to corruption that are found in different countries. In order to do this I will put the cases of Taiwan, a democracy, and the PRC, a non-democracy in comparative perspective. For both cases I will first provide an overview of the development of the causes and curbs of corruption through a literature study of the social and institutional developments in the trends of corruption in both countries. Then, I will analyze both cases’ contexts of causes and curbs of corruption using John S. T. Quah’s model for analyzing a country’s corruption context. Then I will. 政治大. place them into a comparative perspective in order to clearly show the differences and similarities of. 立. both cases.. ‧ 國. 學. With this method we will be able to identify the role of political regime type in both contexts.. ‧ y. Nat. I.IV Literature Review: Contexts of Corruption. io. sit. If we want to assume a perspective less biased by political regime types we must first define. n. al. er. corruption and secondly adopt a framework that delineates the basic causes and curbs of corruption.. Ch. In this section I will shortly address both issues.. engchi. i n U. v. A definition often used is provided by Joseph S. Nye who says that corruption is “behavior which deviates from the normal duties of a public role because of private-regarding (family, close private clique), pecuniary or status gains; or violates rules against the exercise of certain types of privateregarding influence. This includes such behavior as bribery (use of rewards to pervert the judgment of a person in a position of trust); nepotism (bestowal of patronage by reason of ascriptive relationship rather than merit; and misappropriation (illegal appropriation of public resources for. 5.

(12) private-regarding uses)”. 11 This definition clearly outlines certain acts of corruption. Additionally, it emphasizes acting against deviations from the normal duties of a public role. This is one of the ways in which defining corruption is dependent on what are considered the normal duties of an official which will deviate between different countries, legal frameworks and government positions. Another definition used mainly to categorize abuse of office by public officials is by Kenneth Gibbons. He lists the following abuses of office: -. “A civil servant gives a position in his office to a relative rather than a better-qualified. 政治大 “A political party wins an election and then removes all office-holders who supported the 立. applicant. (Nepotism)” -. ‧ 國. -. 學. opposition party. (Patronage)”. “A legislator owns stock in a mining company, and votes for a bill which will give tax. ‧. concessions to the company. (Legislative conflict of interest).” 12. sit. y. Nat. Heidenheimer adds the following to this list. “Awarding of government contracts to favored friends or. al. er. io. political supporters, lying to the media and the public, and many forms of campaign finance.” 13. v. n. These definitions provide a clear overview of the different manifestations of corruption. I’ve listed. Ch. engchi. i n U. them for the purpose of providing more insight in these. John S.T. Quah uses the following definition in his work. 14 It is based on the United Nations Development Program’s definition: “the misuse of public power, office or authority for private benefit – through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement.” 15 Quah adds the words “or private” to. Nye, Joseph S. “Corruption and Political Development: A Cost-Benefit Analysis.” The American Political Science Review 61.2 (1967): 419. 12 Adapted from: Gibbons, Kenneth M. "Variations in attitudes toward corruption in Canada." Political Corruption. A handbook. Ed, Heidenheimer, A. J., and Michael Johnston. New Brunswick , 1989. 779. 13 Heidenheimer, A. J., and Michael Johnston. Political Corruption: Concepts and Contexts. New Brunswick, 2002. 27. 14 Quah, Jon S. T. Curbing corruption in Asian countries: An Impossible Dream?. Singapore: Emerald Group Publishing, 2011.10. 15 United Nations Development Programme. Fighting Corruption to Improve Governance. New York, 1999. 7. 11. 6.

(13) the definition, thus: “the misuse of public or private power”. 16 This has the advantage of being able to include private abuse of power in his research. However, for the purpose of simplicity it is best to use the definitions of corruption offenses in legal terms in our cases of Taiwan and the PRC. These will be addressed later in the text. In addition to this definition there are two more dimensions that we must explore in our assessment of corruption. These can be embodied in two questions. First, “is corruption a fact of life or a way of life?” 17 The first kind takes place in a country where the rule and authority of the law is established. The second kind is found in a country where the rule of law is not yet firmly founded. 18. 政治大. The second question is the following: “is corruption grand or petty in nature?” 19 “Grand corruption. 立. refers to corruption by political leaders and senior civil servants and usually involves large. ‧ 國. 學. international bribes and hidden overseas bank accounts. […] On the contrary, petty or ‘survival’ corruption is practiced by underpaid junior civil servants who demand bribes from the people to. ‧. expedite their applications or perform other favors.” 20 It is important to note that, although grand. Nat. sit. y. corruption is more destructive in general, both are extremely disruptive to society and any anti-. n. al. er. io. corruption effort can only be deemed successful if it can tackle both forms of corruption at the. i n U. v. same time. For this research I prefer to use a different terminology for this distinction, namely need-. Ch. engchi. driven and greed-driven corruption. These are more self-explanatory.. For our assessment framework it is important to establish the factors that will provide political leaders, civil servants, and bureaucrats with strong incentives to commit acts of corruption. It is equally important to establish how to dispel these incentives using institutional measures. This is. Quah.(2011): 10. Quah.(2011): 10. 18 Lovell, David W. “Corruption as a Transitional Phenomenon: Understanding Endemic Corruption in PostCommunist States.” Corruption. Anthropological Perspectives. Ed. Haller, Dieter and Chris Shore. London, 2005. 79. 19 Quah. (2011): 10. 20 Ibid.: 10-11. 16 17. 7.

(14) what I will refer to as the causes and curbs on corruption in the rest of the text, otherwise known as the contexts of corruption. First we will discuss the causes of corruption. Leslie Palmier has identified three of these factors, namely: opportunities, salaries and policing. 21 The balance between these factors can have a significant effect on the political economy of corruption in a country. Countries with few opportunities for corruption, good salaries and effective enforcement of anti-corruption laws normally have minimal corruption. Therefore, according to Palmier, “an effective anti-corruption strategy should reduce or remove the opportunities for corruption, raise the salaries of civil servants. 政治大. and political leaders, and ensure a high degree of policing.” 22 In countries with many opportunities,. 立. low salaries and weak enforcement, corruption will be more substantive. 23 Additionally, we will add. ‧ 國. 學. ‘culture’ and ‘political will to genuinely tackle corruption’ as factors, as Quah does. 24 Let’s discuss the factors of Quah’s model of the causes and curbs of corruption in more detail.. ‧. The first factor contributing to corruption is relatively low civil servant salaries. In the public sector,. Nat. sit. y. wages are generally not as competitive as those in the private sector. In developing countries. n. al. er. io. government officials have strong incentives to collect bribes in order to make ends meet.. i n U. v. Additionally, with low wages it becomes more difficult to recruit competent and qualified personnel.. Ch. engchi. The second factor is opportunities for corruption and red tape. When the role of government expands into more sectors of society and the economy, generally the amount of opportunities for corruption increases. For example, when bureaucrats are put in charge of the administration of certain regulations regarding the access to certain goods and services, the position can be abused to extract. Palmier, Leslie. The Control of Bureaucratic Corruption: Case Studies in Asia. (New Delhi, 1985): 271-272. Quah. (2011): 14. 23 Palmier. (1985): 272. 24 Quah. (2011): 20-22. 21 22. 8.

(15) rents from those seeking these goods or services. Regarding these opportunities Warwick 25 distinguishes ‘wet’ and ‘dry’ government agencies. ‘Wet’ agencies are in direct contact with the public, like customs or police departments. Working in this kind of agency provides more opportunities for corruption than ‘dry’ agencies which are more office based, like research and administrative departments. Additionally, government ‘red tape’ provides opportunities to provide expedition or delays to government application procedures. The third factor is the risk of detection and punishment of corrupt practices. Corruption thrives when it is perceived as a low risk, high reward activity. 26 Additionally, in some countries, arrested officials are. 政治大. able to interfere with the investigation by soliciting the influence of their protectors in the hierarchy.. 立. The perception of the risk is highly influenced by the exposure of corruption by mass media. The. ‧ 國. 學. following quote by Singapore’s former Prime Minister explains the power of public opinion on the corruption risk perception very eloquently: “[..] the strongest deterrent is in a public opinion which. ‧. censures and condemns corrupt persons, in other words, in attitudes which make corruption so. Nat. sit. y. unacceptable that the stigma of corruption cannot be washed away by serving a prison sentence.” 27. al. n. the amount of guilty verdicts.. er. io. A more objective method is the amount of corruption cases that make it to court in comparison to. Ch. engchi. i n U. v. Fourth, we need to take cultural factors in account when assessing corruption. For example, in many East-Asian countries the tradition of gift giving can often not be distinguished from bribery. These traditions can be so strongly ingrained in the customs of the inhabitants of a country that bribery is not even perceived as corruption. 28 Another example is the culture of ‘amoral familism’, a term. Warwick, Donald P. “The Effectiveness of the Indonesian Civil Service.” Southeast Asian Journal of Social Science. 15.2 (1987): 43. 26 Quah. (2011): 18-19. 27 Straits Times. January 27, 1987: 11. 28 Quah. (2011): 21. 25. 9.

(16) coined by Edward Banfield. 29 In cultures with this tradition the family is more important than the rest of society. This encourages deviance from universalistic norms, because advancing your family’s interests goes above the interests of society as a whole. This factor is deeply ingrained in some societies and is very hard to reverse and will likely take multiple generations to change substantially. In our comparison we will mostly use the cultural factor as a control variable. We assume that the cultures of Taiwan and the PRC are relatively similar in terms of their influence on corruption contexts. However, it must be noted that there are most likely subtle and significant differences to be explored that are beyond the scale of this study. I want to stress culture’s importance although we. 政治大. downplay it in this text to highlight other factors.. 立. Our final factor causing corruption is a lack of genuine political will to tackle the problem. This is most. ‧ 國. 學. likely caused by corrupt, senior officials approaching the end of their careers at the top levels of government. “If a country’s political leaders are not committed to fighting corruption this lack of. ‧. commitment will be reflected in the absence of comprehensive anti-corruption legislation, and the. Nat. sit. y. anti-corruption agencies’ inadequate budget and personnel.” 30 The political will of the leadership is. n. al. er. io. additionally reflected by the reforms they put in place. Are they aimed at cracking down on. i n U. v. corruption in the short term or do they consist of reforms aimed at bringing about long-term improvement?. Ch. engchi. The second part of Quah’s model for corruption contexts are the different manifestations of anticorruption measures. He posits three distinct patterns of corruption control as employed in AsiaPacific countries and they are based on combinations of anti-corruption laws and anti-corruption agencies (hereafter referred to as ACAs). 31 The first pattern is found in countries with anticorruption legislation, but no ACA for the implementation of those laws. An example was Mongolia. Banfield, E. C. The Moral Basis of a Backward Society. New York, 1958. Quah. (2011): 22. 31 Quah. (2011): 25-29. 29 30. 10.

(17) before the launch of its special ACA in 2006. It had a law on Anti-Corruption and three provisions making bribery illegal. The task of upholding these laws fell solely on the General Prosecutor’s Office and the courts. The second pattern involves anti-corruption legislation and multiple ACAs. Having multiple ACAs has negative effects on their efficiency. Sadly, in many cases there is overlap in jurisdiction and even competition between agencies. An example of this pattern is the Philippines with seven laws and a stunning 19 anti-corruption agencies. The third pattern is of the type found in Singapore and Hong Kong. This pattern involves the. 政治大. implementation of anti-corruption law by a single, independent ACA. These are the Corrupt. 立. Practices Investigation Bureau (CPIB) in Singapore and the Independent Commission against. ‧ 國. 學. Corruption (ICAC) in Hong Kong. These two countries, although small, have been the most successful in combating corruption in the Asia-Pacific. Therefore this pattern is, by Quah, perceived. ‧. as the most effective pattern.. Nat. sit. y. With this model of causes of corruption and institutional anti-corruption measure patterns, we will. n. al. er. io. be able to understand the contexts of corruption in our cases studies in a qualitative way.. I.V Hypothesis. Ch. engchi. i n U. v. My overall hypothesis is that the frameworks of the causes and curbs of corruption are essentially the same in both countries. In other words, corruption is a problem that appears in similar ways in both democratic and PRC-style authoritarian countries, because corruption trends are chiefly driven by reforms and trends driven by economic development. Democracies were able to combat corruption more effectively than authoritarian countries, because almost all cases of the latter were unable to attain sustained economic growth and development.. 11.

(18) However, China has been growing economically since its opening up in the early eighties. Therefore I predict that it benefits from development in terms of corruption just like a democracy would. If this proves to be true, we can make claims about a universal nature of corruption and additionally a universal method of curbing it. Additionally we can provide preliminary policy recommendations for both countries. From the perspective of the framework I expect that the comparison of the two case countries shows a similar over time trend from mostly low level need-driven malfeasance towards increasingly grand level greed-driven corruption. First of all I expect that in the past (in the times of authoritarian. 政治大. Taiwan and early post-Mao China) civil servant salaries were very low, but have risen substantially since. 立. then. Additionally, I expect that during this time the civil servant examination system has become. ‧ 國. 學. more rigid and complicated, thus bringing down opportunities and incentives for low-level corruption.. ‧. Moreover, I hypothesize that opportunities for corruption and red tape favor grand corruption more than. Nat. sit. y. low level malfeasance over time due to administrative reforms and increasing transparency and rigid. n. al. er. io. requirements in accounting practices for the use of taxpayer money by local officials. Administrative. i n U. v. reforms and the increasing complexity of red tape reduce opportunities for lower level officials to. Ch. engchi. engage in certain acts of corruption. However, reforms are always implemented from the top. Therefore, it might be creating loopholes that only the highest officials are capable of abusing, thus increasing opportunities for grand corruption. In line with these reforms I expect the same trend to happen in the risk of detection and punishment of corruption. With increasingly transparent accounting, the risk of detection will become higher for low level officials, but due to increasingly complex red tape it might become less risky for high level officials. This again would reflect a shift from mostly need-driven- towards chiefly greed-driven corruption. 12.

(19) The factor of culture plays a part in Chinese societies regarding corruption. A persistent gift giving culture and strong hierarchical ties all create a culture in which corruption is, to a certain level, seen as normal. However, since the Taiwan and China are both culturally Chinese, this factor in our framework mainly serves as a control factor, making these two cases highly comparable. Additionally, I expect that lack of political will plays a similar role in both countries. The people leading both countries are currently split between younger, Western-educated politicians and members of the ‘old guard’ who potentially have more vested interests. This factor has a strong influence on anticorruption politics in the following form. In terms of anti-corruption the young and the old find a. 政治大. consensus at dealing with lower level corruption, but spending less effort on higher level. 立. malfeasance.. ‧ 國. 學. I expect that this final factor is one of the reasons why both cases don’t have a single fully independent anti-corruption agency. Both countries have multiple ACAs that answer directly to the. n. al. er. io. sit. y. Nat. I.VI Methodology. ‧. top leadership.. i n U. v. My methodology is twofold. First I will provide a literature study of the development of corruption trends in both Taiwan and the PRC.. Ch. engchi. Then I will provide an analysis of both cases following Jon S. T. Quah’s model for the frameworks of causes and curbs of corruption. This will be done through careful literature research of primary and secondary source material. This model has not been conceptualized and used outside Quah’s own work before. Quah has decades of experience studying corruption and his insightful pieces on corruption in Asia have inspired me to follow in his footsteps and use his model and apply it in a comparative context.. 13.

(20) This analysis will allow for a comparison of the two corruption contexts of democratic Taiwan and non-democratic China and will highlight the similarities and differences. Through this method I will be able to make conclusions about the relationship between political regime types and the contexts of corruption.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 14.

(21) II. Historical Literature Study of the Case of Taiwan Taiwan’s postwar history has been dynamic. In 1949, the Chinese Nationalist Party, the Kuomintang (KMT), retreated from the mainland to settle on the island of Taiwan after they lost the Chinese Civil War to the Chinese Communist Party. Upon arrival on the island, KMT Chairman Chiang Kai-shek established martial law. This is the official starting point of authoritarian rule on the island. 32. 政治大. Democratization started in 1986 when the Democratic Progressive Party (DPP) was founded and. 立. tolerated by the authoritarian regime. In 1987, Chiang Ching-kuo, Chiang Kai-shek’s son and. ‧ 國. 學. successor, lifted martial law. After Chiang Ching-kuo’s death in 1987, Lee Teng-hui (KMT) succeeded him and became the first democratically chosen president of Taiwan in 1992.. ‧. Democratization was complete when the DPP won the presidential election on an anti-corruption. Nat. sit. y. platform in 2000 and effectively ended 51 years of KMT rule. 33 The important questions we will. al. n. corruption in Taiwan?. er. io. look at are: a) did democratization reduce corruption in Taiwan; and b) what are the causes of. Ch. engchi. i n U. v. A good place to start analyzing a country’s levels and nature of corruption is Transparency International’s Corruption Perception Index data of the country. This data can be found in Table 1 and Figure 1 below. Lee Teng-hui’s KMT was perceived as heavily corrupted. The DPP promised to end that when Chen Shui-bian won the election race on an anti-corruption platform in 2000. Their clean image was destroyed soon after as evidence arose of massive bribes being demanded by his wife for mediating. Yu, Chilik, et al. "Evolving perceptions of government integrity and changing anticorruption measures in Taiwan." Preventing Corruption in Asia. Ed. Gong, Ting, and Stephen K. Ma. Routledge, 2009. 189-190. 33 Yu, et al. (2009). 32. 15.

(22) in massive business deals. After losing the election in 2008, President Chen Shui-bian was arrested upon charges of embezzlement, taking bribes and money laundering. 34 In 2009, the Hong Kong-based Political Economic Risk Consultancy (PERC) reported in its annual report on corruption in Asia that for the first time Taiwan scored lower than China in terms of corruption. China ranked 8th with a score of 6.16 (0=least corrupt; 10=most corrupt) and Taiwan ranked 10th with a score of 6.47. Chen Shui-bian’s successor Ma Ying-jeou rejected the finding and ordered the anti-corruption agencies in Taiwan to provide a report on major cases and a plan to amend the situation. 35 His first term in office was marked as one marked by relative stabilization of. 政治大. cross-strait relations and the establishment of a new ACA (Agency Against Corruption). His second. 立. term has, so far, been marked by popular mistrust as he is now commonly referred to the “9%. ‧ 國. 學. president” referring to his abysmal recent approval ratings. 36 Regardless of his popularity, Transparency International’s Corruption Perception Index has given Taiwan a stable score of 6.1 for. ‧. three consecutive years since 2011, indicating stagnation but a peak in the trend the development of. sit. y. Nat. corruption.. n. al. er. io. What are the more qualitative aspects of the trends in corruption practices in Taiwan? In the next. i n U. v. section we will take a more qualitative look at common acts of corruption in Taiwan.. Ch. engchi. Quah. (2011): 153-155. Quah, Jon ST. Taiwan's Anti-Corruption Strategy: Suggestions for Reform. Maryland: Maryland Series in Contemporary Asian Studies, 2010. 1-2. 36 “Banyan: On the antlers of a dilemma.” The Economist. 29 March 2014. Web. 4 May 2014. 34 35. 16.

(23) Table 1: TI’s Corruption Perception Index of Taiwan (1995-2013) Year. CPI Rank. CPI Score. No. of Countries. 1995. 25th. 5.08. 41. 1996. 29. th. 4.98. 54. 1997. 31st. 5.02. 52. 1998. 29th. 5.4. 85. 1999. 28th. 5.6. 99. 2000. 28th. 5.5. 90. 2001. 27th. 5.9. 91. 2002. 29th. 2003. 30th. 2004. 35th. 2005. 立. 5.6 治政大 5.7. 102 133. 32nd. 5.9. 159. 2006. 34th. 5.9. 2007. 34th. 5.7. 2008. 39th. 5.7. 2009. 37th. 5.6. 2010. 33. rd. 32. nd. 2012. 37. th. 2013. 36th. 180. y. 180. n. er. io. al. sit. 5.8 6.1. i n C h6.1 engchi U 6.1. 163. ‧. Nat. 2011. ‧ 國. 146. 學. 5.7. v. 180 178 183 176 177. Note: CPI score ranges from 0 (most corrupt) to 10 (least corrupt) Retrieved from: www.transparency.org. 17.

(24) Figure1: TI’s Corruption Perception Index of Taiwan (1995-2013). 6.5 6.3 6.1 5.9 5.7 5.5 5.3 5.1 4.9 4.7 4.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013. 政治大. Note: CPI score ranges from 0 (most corrupt) to 10 (least corrupt) Retrieved from: www.transparency.org. 立. ‧ 國. 學. II.I Corruption in Taiwan. ‧. Corruption was a major problem within the KMT ranks since its rule on the mainland. As Chiang. y. Nat. Kai-shek tried to consolidate his power during the Chinese Civil war he collected an ever larger. io. sit. group of allies in the form of multiple warlords. Although his Nationalist army was large, it was very. n. al. er. diverse and not very disciplined. The KMT suffered from factional struggles, corruption and low. Ch. i n U. v. morale. 37 These deep-seated troubles followed the KMT to Taiwan after the Japanese surrender in. engchi. 1945 and the retreat from the Mainland in 1947. Although Chiang Kai-shek recognized that corruption was a problem in 1952 and initiated some reforms, including the exclusion of some leaders suspected of corruption and the raising of civil servant salaries, anti-corruption was never given priority during the period of martial law. 38 Quah indicates that according to the 4,177 corruption cases listed in Taiwan’s annual Anticorruption Yearbooks the most common forms of corrupt practices in Taiwan during 1989-2002. 37 38. Quah. (2010): 11. Ibid.: 12.. 18.

(25) were illicit gains (33.6%), malfeasance (19.3%), bribery (17.7%), misappropriation of public funds (16.3%) and graft (13%). Additionally, he shows that during 1989-1998 the majority of the suspects of corruption were civil servants. From 1999-2008 the majority were non-civil servants. 39 These numbers, however, do not tell us much as these numbers do not take into account the amount of money involved. Therefore, it is more beneficial for our research to take a closer look at common practices of corruption in order to establish the causes. One of the most common forms of corruption in Taiwan is vote-buying. It can be defined as “the exchange of money or gifts for a vote between candidates or their agents (vote brokers) and voters. 政治大. during an election campaign with the aim of winning the election. 40 In most cases the gift is money.. 立. Other gifts include hosting “election banquets, transfer of loans, increasing employees’ salaries, and. ‧ 國. 學. payment of voters’ tax bills. 41. When money is used to buy votes, the average amount is less than the salary of a day’s work. For. ‧. this kind of vote-buying the goal is not to buy the vote, but to buy the loyalty of supporters and. Nat. sit. y. promote the candidate. 42. n. al. er. io. The next common form of corruption in Taiwan is Heijin or “Black Gold” politics. Hei means black,. i n U. v. referring to the underworld, and jin means gold. Heijin is a common word in Taiwan referring to the. Ch. engchi. “penetration into politics of violent underworld figures and greedy business tycoons and the inevitable subsequent social ills such as vote-buying, political violence, insider trading, bid rigging, and official (and unofficial) corruption.” 43 The abolition of martial law in 1987 had the consequence of increasing gang violence because of the release of many criminals who were arrested during an anti-organized crime campaign in 1984. In. Quah. (2010): 13. Quah. (2011): 165. 41 Ibid.: 166. 42 Ibid.: 166-167. 43 Chin, K. L. Heijin: Organized Crime, Business, and Politics in Taiwan. Armonk: M. E. Sharpe, 2003. 8. 39 40. 19.

(26) 1990 the Taiwanese government unleashed another clean-up campaign named “Operation Cleansweep”. In reaction to these campaigns, some underworld figures transformed themselves into politicians or businessmen in order to keep themselves safe. In 1996, current president Ma Yingjeou, who was the Minister of Justice at the time, launched a campaign to root out gangsters in politics. This campaign led to the arrest of around a hundred underworld figures, of which some were politicians. 44 The problem of heijin politics can be attributed to the concurrence of the ambitions of politicians, businessmen and gangsters. Politicians rely on business for campaign funds and on gangsters to. 政治大. facilitate vote-buying. Businessmen rely on politicians for the procurement of permits and on. 立. gangsters for protection against victimization by other gangs and the settlement of private business. ‧ 國. 學. disputes. Finally, gangsters rely on protection by politicians against the law and on the help of businessmen in the procurement of profits. 45. ‧. The problem of Heijin politics is different from criminal penetration of politics in other countries,. Nat. sit. y. because “the integration of upper-world and underworld has contributed to the development of a. n. al. er. io. morally confusing society where politicians are talking and acting like gangsters and gangsters are talking and acting like politicians.” 46. Ch. engchi. i n U. v. II.II Anti-Corruption Measures in Taiwan Anti-corruption measures in Taiwan can be separated into government offices charged with the task of anti-corruption, otherwise known as Anti-Corruption Agencies (ACAs), and anti-corruption legislature.. Quah. (2011): 168. Chin. (2003): 16 46 Ibid.: 19. 44 45. 20.

(27) Taiwan has multiple ACAs. The first one is the Ministry of Justice Investigation Bureau (MJIB). It is the lead ACA in Taiwan. The official task it has been charged with is the “the investigation and prevention of matters that may jeopardize national security and violate national interests; matters which shall be stipulated by the Executive Yuan.” Its two primary missions are to protect national security and investigating major crimes. The government bureau has nine official functions: -. Prevention of sedition. -. Prevention of treason. -. Prevention of unauthorized disclosure of national secrets. -. 政治大 Investigation of corruption, bribery, and vote-buying 立 Prevention of drug trafficking. -. Coordination in handling cases of organized crime. -. Prevention of significant economic crimes and money laundering. -. Investigation of national security matters. -. Other investigations and prevention of matters as assigned by superior authorities. ‧. ‧ 國. 學. -. n. Ch. engchi. er. io. sit. y. Nat. al. concerning national security and interests. i n U. v. As we can see only the fourth and last functions are actually related to fighting corruption. Additionally it needs to deal with “counter-infiltration from the PRC, prevention of infiltration from other countries, counter terrorism, protection of national secrets, domestic security investigation, coordination of national internal security, and research on cross-strait relations. Furthermore it is responsible for investigating public corruption, malfeasance and election fraud; economic crime; drug crime, money laundering and [online] crime.” 47 Therefore we can state that the MJIB is not a. 47. Quah. (2010): 54.. 21.

(28) dedicated ACA. 48 It was the lead ACA until the establishment of the Agency Against Corruption in 2011. We will expand upon their relationship later. The origins of the Ministry of Justice Investigation Bureau go back to the establishment of the Investigation Bureau of the Ministry of Interior in Kuanchew in 1949. It relocated to Taipei in December of the same year. 49 On June 1st, 1956 it assumed responsibility for major investigation and internal security issues concerning national safety and violation of national interests and was renamed the Investigation Bureau of the Ministry of Judicial Administration. Dealing with the offense of ‘corruption and abuse of power’ was one of its responsibilities. In May 1979 the. 政治大. Economic Crime Prevention Center was established and took over the anti-corruption activities. In. 立. 1980, the judicial system was reorganized and the Investigation Bureau was renamed the MJIB.. ‧ 國. 學. The MJIB formed the Corruption Elimination Department in February of 1989 and assigned a staff of 505 people and took over anti-corruption activities again. It was separated into five sections. The. ‧. first was charged with the planning, promotion, supervision and evaluation of anti-corruption work.. Nat. sit. y. The second and third were assigned the planning direction of anti-corruption activities in northern. n. al. er. io. and eastern Taiwan and in central and southern Taiwan respectively. The fourth section was. i n U. v. concerned with reports and prevention or corruption and the fifth was responsible for secretarial. Ch. engchi. work of the Supervision Committee of Ethical Affairs of the Executive Yuan and investigations transferred form the ethical affairs units that we will discuss in the next section. The CED was established following the experiences of relatively successful anti-corruption activities of the ICAC in Hong Kong and the CPIB in Singapore. 50 In February 1991 it was renamed the Anti-Corruption Division (ACD) and the five sections were charged with new responsibilities. “Section I was entrusted with the acceptance of various reports of. Quah. (2010): 54. Ibid.: 54. 50 Ibid.: 55. 48 49. 22.

(29) impeachment and management of various clues concerning corruption cases. Section II was responsible for checking the clues and the investigation and supervision of general corruption cases. Section III dealt with the investigation, prosecution, supervision of special cases and cases referred by the Executive Yuan, Control Yuan, and other government agencies. Section IV was given the task of preparing cases studies, conducting research and providing analysis and suggestions for improving the ACD’s anti-corruption efforts. Section V was responsible for the planning, controlling, evaluating, and execution of the anti-corruption task by collecting relevant statistics, compiling anti-corruption regulations, and coordinating the efforts of the relevant government. 政治大. agencies. A Special Team was also formed to prevent and investigate public construction fraud.” 51. 立. The second ACA is the Agency Against Corruption (AAC), previously known as the Department of. ‧ 國. 學. Government Employee Ethics (DGEE). The Agency Against Corruption was established recently in 2011 and took over the supervision of Government Employee Ethics Units from the previous. ‧. DGEE. According to the Anti-Corruption Yearbook 2012, the AAC is “a composite organization. Nat. sit. y. that fulfills both the functions of corruption prevention and corruption eradication and is. n. al. er. io. responsible for the tasks of promoting anti-corruption policies, anti-corruption tasks, corruption. i n U. v. prevention, and corruption eradication. […]. The staff responsible for investigating corruption and. Ch. engchi. related crimes has judicial […] powers. AAC also initiated the groundbreaking “resident prosecutor” system with district prosecutors selected by the MOJ stationed at the AAC and becoming directly involved in the AAC’s investigation procedure to improve the quality of evidence gathering and the efficiency of the investigation.” 52 Although it states that the AAC is an independent government organ, it falls under the Ministry of Justice. The origins of the AAC are found in July 1953. The Taiwanese government formed a security office for maintaining internal security control. Fighting corruption was not a part of their assignments yet. 51 52. Quah. (2010): 56. Agency Against Corruption. Taiwan Anti-Corruption Yearbook. Taiwan, 2012. 139.. 23.

(30) In September 1968, government employee ethics investigation was added to the office’s list of functions. In 1972 the security office was consumed by the Personnel Department II. On June 16th, 1992 the Legislative Yuan passed the ‘Statute for the Establishment of Government Employee Ethics Organization and its Personnel’ which reorganized the Personnel Department II into the DGEE. 53 In 2011 the AAC was established and it took over the supervision of Government Employee Ethics Units and got more executive functions. In summary the AAC has the following functions:. 政治大. Formulating policies. -. Preventing corruption. -. Cracking down on corruption. -. Supervising Employee Ethics Units. ‧. ‧ 國. 立. 學. -. Before further addressing the AAC we should establish how the Taiwanese employee ethics units. Nat. sit. y. operate. Government ethics in Taiwan is implemented by various public prosecutors offices, the. n. al. er. io. MJIB and government ethics units under supervision of the AAC. The task of eliminating. v. corruption is executed by the public prosecutor offices (PPOs) and the MJIB. The Government. Ch. engchi. i n U. Ethics Units under the AAC’s supervision are focused on the prevention of corruption. “All public agencies in Taiwan except for elective institutions, military organizations, and public schools, have government ethics units, which are responsible for detecting corruption by advising the heads of the organizations on the establishment of built-in anti-corruption mechanisms.” 54 In addition to preventing corruption, they are also in charge of protecting confidential information related to national security.. 53 54. Quah. (2010): 56. Ibid.: 57.. 24.

(31) In addition to supervising the Government Employee Ethics Units, the AAC has the following divisions: -. Planning Division: long term planning; formulating long- and medium-term plans for anticorruption. -. Corruption Prevention Division: “formulation of corruption prevention laws and systems; implementation of conflict-of-interest act, asset declaration of public officials; enforcement of ethics codes for public servants, and publicity and education on clean politics […] in. 政治大 Malpractice Investigation Division: “Formation of laws and regulations, systems and 立 public agencies, at schools and in businesses and civic bodies.”. -. ‧ 國. whistle-blowers, and corruption-crackdown administration.”. Northern, Central, and Southern Investigation Offices: “Gathering criminal evidence in the. ‧. -. 學. measures; investigation in corruption-related crime; encouragement and protection for. sit. y. Nat. district; making analysis and investigation” 55. al. n. 240 anti-corruption officers. 57. er. io. In 2014 the AAC employs 106 anti-corruption investigators 56, but it is entitled to the recruitment of. Ch. engchi. i n U. v. The third of the anti-corruption agencies in Taiwan are the Public Prosecutor’s Offices. Apart from the MJIB, the investigation of corruption cases is also executed by the Supreme Prosecutor’s Office (SPO), the High Prosecutor’s Offices (HPOs) and the 21 PPOs throughout Taiwan. Additionally there are four Special Investigation Task Forces focused on criminal profiteering (one at the HPO named the ‘Investigation Task Force for Criminal Profiteering Crimes’, 58 and three branches in Taichung, Tainan and Kaohsiung). “The PPOs are responsible for prosecuting crimes and Agency Against Corruption. AAC Overview (2013): 4-5. Hsiao, Po-wen. “Taiwan’s anti-corruption agency lacks manpower.” Want China Times. 24 June 2014. Web. 15 June 2014. 57 AAC Overview. 3. 58 Herbert Smith LLP. Guide to Anti-Corruption Regulation in Asia 2012/2013. Hong Kong: Herbert Smith, 2012. 66. 55 56. 25.

(32) supervising the execution of criminal verdicts. […] Their additional functions include exercising judicative power over criminal cases, administering probation and aftercare services, increasing the legal awareness of peoples’ rights and obligations, offering legal aid, and building capacity to protect victims of crime.” 59 Figure 2 shows how a corruption case in Taiwan is processed. Investigation starts in either the MJIB or the AAC. These two agencies do not work together and in actuality compete with each other. In the recent case of Taoyuan County Deputy Commissioner Yeh Shih-wen, following the Agency Against Corruption’s investigations, 60 the cases was forwarded to the Procuratorate for further. 政治大. questioning and, most likely, prosecution in the future. The Ministry of Justice Investigation Bureau. 立. had no influence in the investigation efforts.. ‧ 國. 學. After investigation by one of the two agencies, the case is forwarded to the Procuratorate after enough evidence is collected. The agencies themselves have no judicial powers, so they rely on the. ‧. Nat. n. al. er. io. sit. evidence is collected the case is forwarded to the court for prosecution.. 59 60. y. Procuratorate to issue warrants to further collect evidence for eventual prosecution. Once sufficient. Ch. engchi. i n U. v. Quah. (2010): 59. Hsiao. (2014).. 26.

(33) Figure 2: Taiwan ACA Case Processing Flowchart. 立. 政治大. ‧ 國. 學 ‧. The second element of a country’s anti-corruption measures is its set of anti-corruption legislation.. sit. y. Nat. The main sources of anti-corruption regulations in Taiwan are the Criminal Code, that “imposes. io. er. punishment for corruption to deter public servants from breaching their fiduciary duties to the nation” 61, the Anti-Corruption Statute that “imposes a heavier criminal responsibility for the crime of. n. al. corruption,”. 62. i n C h Act. and the Government Procurement engchi U. v. The Anti-Corruption Statute became law in 1963 in order to stop and punish corrupt officials. It applies to all public officials (Article 2). “Article 4 specifies the penalty of imprisonment from 10 years to life and a maximum fine of NT$100 million for those found guilty of any of these five offenses:” -. 61 62. “Theft or misappropriation of public equipment or property.. Herbert Smith LLP. (2012): 66. Ibid.: 66.. 27.

(34) -. Corruptly demanding, receiving, or accepting anything of value by means of coercion, extortion, conversion or collection.. -. Falsely reporting the quantity of public equipment or goods procured, receiving an unauthorized commission on procurement or engaging in other corrupt acts relating to the construction of government projects or the procurement of government equipment or materials.. -. Using government vehicles to transport contraband or to transport goods for the purpose of tax evasion.. 學. ‧ 國. -. 治政 Corruptly demanding, soliciting, receiving, accepting or大 agreeing to receive or accepting any 立 bribe or other unjust enrichment in return for being induced to execute or fail to execute any act in violation of the official duties of such official or the commissioned duties of such. ‧. person commissioned to undertake specific public affairs duties.” 63. sit. y. Nat. This penalty will be enhanced for officials in higher positions, and reduced for those who voluntarily. io. er. surrender themselves and return all proceeds if other accomplices are arrested following their assistance to the police. As shown in Table 2, more than half of the number of corruption offenses. al. n. iv n C during the period of 2004-2008 broke the Anti-Corruption Statute, h e n g c h i U reflecting the law’s importance among Taiwan’s anti-corruption legislation.. 63. Quah. (2010): 61.. 28.

(35) Table 2: Number of Offenses of Anti-Corruption Laws in Taiwan (2004-2008) Anti-Corruption. Government. Statute. Procurement Act. 2004. 269 (57.5%). 2005. Year. Criminal Code. Total. 118 (25.2%). 81 (17.3%). 468 (100%). 235 (59.8%). 94 (23.9%). 64 (16.3%). 393 (100%). 2006. 227 (49.4%). 155 (33.8%). 77 (16.8%). 459 (100%). 2007. 359 (50.3%). 233 (32.6%). 122 (17.1%). 714 (100%). 2008. 289 (53.7%). 148 (27.5%). 101 (18.8%). 538 (100%). Total. 1,379 (53.6%). 748 (29.1%). 445 (17.3%). 2,572 (100%). Retrieved from: Quah. (2010): 62.. 立. 政治大. The second important law for anti-corruption in Taiwan is the Government Procurement Act. ‧ 國. 學. (GPA). As shown in table 2 during 2004 and 2008, 29.1% of all corruption cases were violations of the GPA. This law was established by President Lee Teng-hui in 1998 with the following objectives:. ‧. “to establish a government procurement system that has fair and open procurement procedures, can. Nat. sit. y. promote the efficiency and effectiveness of government procurement operation, and is able to. n. al. er. io. ensure the quality of procurement.” 64 It defines ‘procurement’ as “the contracting of construction. i n U. v. work, the purchase or lease of property, the retention or employment of services, etc. […] It. Ch. engchi. imposes a penalty of imprisonment from one to seven years and a fine of NT$3 million for anyone who commits violence, administers drugs, or hypnotizes a supplier not to tender or to tender contrary to its real intention, or cause the winning tenderer to forego the award or to assign or subcontract after the award.” 65 This punishment will be enhanced or reduced based on if the crime results in the victim’s death or not.. 64 65. Quah (2010): 61. Ibid.: 61.. 29.

(36) Thirdly certain forms of corruption fall under the Criminal Code. Most notably, the crime of votebuying falls under the Criminal Code, the Presidential and Vice Presidential Election and Recall Law, and the Public Officials Election and Recall Law.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 30.

(37) III. Historical Literature Study of the Case of the PRC Corruption in China surged after the start of the Deng Era reforms as economic changes and growth created incentives for abuse of power by officials that did not exist during the planned economy era. This triggered a self-proclaimed war on corruption by the CCP leadership. Corruption in China has experienced considerable development since the eighties. Table 3 and Figure 3 show Transparency International’s Corruption Perception Index from 1980 to 2013. It leads one to. 政治大. believe that, corruption decreased over the nineties and then stagnated in the twenty-first century.. 立. Scholars agree that corruption in China experienced a structural change 66 during the period between. ‧ 國. 學. the eighties and the twenty-first century, in the form of a “qualitative shift from the prevalence of rank-and-file involvement to more senior officials' involvement in corruption” 67, or as Wedeman. ‧. calls it, an intensification of corruption, in terms of senior officials and increasingly large sums of. Nat. sit. n. al. er. io. the 1980s onwards.. y. money. 68 In this chapter we will look at the causes and characteristics of the corruption trends from. Ch. engchi. i n U. v. Wederman, Andrew. "The intensification of corruption in China." The China Quarterly 180 (2004): 895-921; Wedeman. (2008); Guo, Yu. “Corruption in Transitional China: An Empirical Analysis.” The China Quarterly 194.1 (2008): 358-360; Ko, Kilkon, and Cuifen Weng. "Structural Changes in Chinese Corruption." The China Quarterly 211, (2012): 718-740. 67 Ko and Weng. (2012): 722. 68 Wederman, Andrew. "The intensification of corruption in China." The China Quarterly 180 (2004): 895-921. 66. 31.

(38) Table 3.: TI’s Corruption Perception Index of the People’s Republic of China (1995-2013) Year. Score. Ranking. Total Countries. 1995. 2.16. 40th. 41. 1996. 2.43. 50th. 54. 1997. 2.88. 41st. 52 85. 58. th. 99. rd. 90 91. 2000. 3.1. 63. 2001. 3.5. 57th. 2002. 3.5. 59th. 2003. 3.4. th. 2004. 3.4. 2005. 3.2. 2006. 3.3. 2007. 3.5. 2008. 3.6. 2009. 3.6. 2010. 3.5. 2011. 3.6. 2012. 3.9. 2013. 4.0. io. n. 78th. 158. 70th. 163. 72nd. 179. 72nd. 180. 79th. 180. 78th. 178. 75th. 182. 80th. 174. 80 C h. 175. th. engchi. Note: CPI score ranges from 0 (most corrupt) to 10 (least corrupt). ‧. Nat. al. st. 學. ‧ 國. 立. 102 治 133 66 政大 145 71. y. 3.4. 52. sit. 1999. 3.5. er. 1998. nd. i n U. v. Retrieved from: www.transparency.org. 32.

(39) Figure 3. TI’s Corruption Perception Index of the PRC (1995-2013). 6.5 6 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013. 政治大. Note: CPI score ranges from 0 (most corrupt) to 10 (least corrupt) Retrieved from: www.transparency.org. 立. ‧ 國. 學. III.I Corruption in the PRC. ‧. From its outset, post-reform China saw a surge in corruption after capitalist market reforms were. sit. y. Nat. implemented and economic development took off. Ko and Weng indicate five main causes, namely. al. er. io. marketization, fiscal decentralization, remnants of the command economy and state-owned. n. enterprises (SOEs), an underdeveloped civil service system and a lack of development in laws curbing corruption. 69. Ch. engchi. i n U. v. Economic growth saw rising incomes in the private sector as public wages remained the same, and so an income gap developed between the private and public sectors. This in combination with distributive power over land, capital and business approvals gave local officials a large incentive to engage in rent seeking behavior. 70 Fiscal decentralization is one of the reform strategies designed to increase local economic efficiency. After successful implementation in the local agricultural sector in the late 1970s and early 1980s, 69 70. Ko and Weng. (2012): 720-722. Ibid.: 720-721.. 33.

(40) fiscal decentralization was implemented in the entire country. As a result, local government officials enjoyed relative fiscal autonomy. 71 Sadly, the uncontrolled nature of this freedom gave officials incentives and opportunities to raise extra-budgetary funds. This was a widespread form in which embezzlement and misappropriation of public funds took place. 72 In order to transition to a market economy smoothly, China maintained a dual-price system between 1980 and 1992. This meant that there were state-set prices and market prices. 73 For example, agricultural firms had to sell a certain quota at state-set prices. Any surplus produced on top of that could be sold for market prices. The gap between these two prices gave officials opportunities for. 政治大. corruption, as they had discretion over prices and quotas. Since the assessment of officials was. 立. largely based on economic performance in their jurisdiction, many of them used their old ties to the. ‧ 國. 學. management of SOEs in combination with power over state prices to give them an unfair advantage in the market. 74. ‧. Another cause of corruption was the civil service system. There was no real distinction between civil. Nat. sit. y. servants and political appointees, so nepotism was a problem. This issue was only solved after the. n. al. er. io. implementation of a meritocratic civil service system in 1993. 75 Apart from this the first-in-. i n U. v. commands of committees have an overconcentration of power, which also incentivizes corruption in some cases.. Ch. engchi. The final factor causing corruption in the eighties was the lack of development in anti-corruption legislature. Statutes regarding the definition of different types of corruption and their corresponding sentences were described only vaguely. The guidelines to corresponding sentences were supplemented by a government document only in 1988. Also, the division of functions and. Naughton, Barry. The Chinese Economy: Transitions and Growth. MIT Press, 2007. 88-90. Ko and Weng. (2012): 721. 73 Naughton. (2007): 91-98. 74 Ko and Weng. (2012): 721. 75 Ibid.: 722. 71 72. 34.

(41) jurisdictions between party and state of the Discipline Investigation Committees and the Ministry of Supervision were unclear and slowed down anti-corruption efforts. 76. After Tiananmen From the start of the nineties a shift in the political economy of corruption started to take place. This is mainly attributed to a change in the role of the government. In this period we observe a change in policy to that of an active government in terms of anti-corruption efforts. Guo argues that this change in government stance was triggered by the 1989 Tiananmen Square uprisings. 77 The. 政治大. rebellion made the CCP realize the severity of the corruption problem. This “wake-up” is also. 立. attributed to the changing context of a private sector growing in importance and increased pressure. ‧ 國. 學. to reform from the outside as the Chinese economy became more and more entwined with the world economy, especially after joining the World Trade Organization in 2001. 78. ‧. The first major reform influencing established corruption trends was the tax reform of 1994. This. Nat. sit. y. was in effect a recentralization of the tax system. Local officials no longer enjoyed the autonomy in. n. al. er. io. the raising and management of tax funds as before, as the decision making authority was held at. i n U. v. more centralized levels. This made it more difficult for local cadres to embezzle and misappropriate. Ch. engchi. public funds. 79 The 2006 abolition of agriculture taxes especially curbed farm tax extortion, as there had been many complaints about tax exploitation of farmers in rural areas. 80 The problem of the misappropriation of public funds was also addressed by the budgeting and accounting reform of 1998 and especially the implementation of the departmental budget planning system in 2000. Along with the establishment of new accounting laws in 1999, these reforms Ko and Weng. (2012): 721. Guo. (2008: 358-360. 78 Ibid.: 722. 79 Ibid.: 724. 80 Kennedy, J. J. “From the Tax-for-Fee Reform to the Abolition of Agricultural Taxes: The Impact on Township Governments in North-West China.” The China Quarterly. 189 (2007): 43-59. 76 77. 35.

(42) standardized government budgeting and accounting practices from the local up to the central levels. This effectively created a higher degree of transparency and mitigated previous incentives for corruption. 81 In 1998 a comprehensive government reform was implemented, effectively downsizing the government body, in order to increase efficiency. For example, the amount of ministries was reduced from forty to twenty-nine. The reform also included the abolition of many “ministry-led industries”. This established SOEs as independent firms, with full decision making authority on the employment of managers, in effect cutting off the old ties with local officials and eliminating. 政治大. opportunities for corruption between local governments and SOEs. 82. 立. In 1993 the old cadre system was replaced by the civil service system, which was based on. ‧ 國. 學. meritocratic principles. In 1997 the civil service exam system was implemented nation-wide. In the following years this system was gradually expanded to other sectors of government. For example, in. ‧. 2003 the examination system was expanded to the People's Court and the People's Procuratorate.. Nat. sit. y. With the institutionalization of recruitment on a meritocratic basis, nepotism in party recruitment. n. al. er. io. and promotion became more difficult. 83. i n U. v. Finally, criminal law dealing with corruption had been expanded greatly. The Chinese Criminal Law. Ch. engchi. (CCL) of 1979 only defined three types of corruption, namely embezzlement, bribery and neglect of duty. In addition, guidelines on punishment were vague and unspecific. The new CCL of 1997 explicitly described seven different types of corruption and gave precise guidelines for the corresponding punishments with degrees of severity. 84 In summary, from roughly the nineties onwards the government engaged in a series of serious reforms in order to close loopholes, standardize government protocol nation-wide, increase Ko and Weng. (2012): 724. Ibid.: 723. 83 Ibid.: 723. 84 Ibid.: 722. 81 82. 36.

(43) supervision and transparency and improve overall efficiency in the political economy of China. One would expect a significant drop in corruption. In contrary, according to the Corruption Perception Index (Fig. 2), corruption worsened from the nineties onwards. How can we explain this? The next section summarizes recent empirical research revealing current trends in official corruption in China.. Changing corruption What are the effects of the change in government stance? We have seen the perceived decrease in corruption from the mid-nineties onwards in Table 3. Figure 4 shows the revealed rate of corruption. 政治大. (based on the amount of corruption cases). The data was compiled by Wedeman and is based on the. 立. number of cases of corruption filed and closed on corruption by the Central Discipline Inspection. ‧ 國. 學. Committee (CDIC) and the People's Court. We can observe a spike in the amount of cases after the 1989 incident. This corresponds with the implementation of the reforms as discussed in the previous. ‧. section. After the spike, the overall number of cases starts to decrease. This claim is substantiated by. Nat. n. al. 85. Ch. engchi. er. io. corruption has fallen between 1998 and 2007. 85. sit. y. empirical research done by Ko and Weng in 2012. They also argue that the number of cases of. i n U. v. Ko, Weng. (2012).. 37.

(44) Figure 4. Revealed Corruption Rate: Index of Economic Crime Cases Filed in the PRC (1980-2006). 政治大. Note: 1997-8=1; Index of economic crime cases filed in the PRC Retrieved from: Wedeman. (2008): 10.. 立. ‧ 國. 學. This does not mean that corruption is getting better overall. Recent empirical research analyzes the data from the anti-corruption institutions in China and makes several significant conclusions.. ‧. Two empirical studies by Guo and Wedeman 86 both conclude that the time between engaging in. Nat. sit. y. corruption and getting caught, or as they call it, the crime-capture lag, has increased (see Figure 5).. n. al. er. io. An increasing crime-capture lag indicates a decrease in risk of capture. During 1992-1996 on average. i n U. v. officials were caught within 20 months of engaging in corruption. In the period 2005-2006 officials. Ch. engchi. were caught in an average of 63 months. 87 This decrease in risk can be associated with a larger actual rate of corruption (ARC), which is a statistic that cannot be measured, only estimated.. 86 87. Guo. (2008); Wedeman. (2008). Wedeman. (2008).. 38.