Does it Pay to Be a Party Cadre?
Estimating the Returns to Being a Local Official in Rural China
by
"The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre.
Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities.
The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre.
Given the increasing returns to non-agricultural employment since China's economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages".
In other words, the rank and file village cadres do their duties either as a job or as service. Since they are constitute 90% of Party membership, we can infer that at least 90% of the CCP is relatively honest. It's also clear from the results they obtain that the top level of the Party–the Steering Committee and their peers–are honest. And we know that, last year, the Party prosecuted 48,000 officials out of 80 million members. This suggests an overt corruption rate of about .06%. Not bad for a developing country whose per capita income is less than Honduras'. And..back at home...
Does it Pay to Be a Party Cadre?
Estimating the Returns to Being a Local Official in Rural China
Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre.
Given the increasing returns to non-agricultural employment since China's economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages".
In other words, the rank and file village cadres do their duties either as a job or as service. Since they are constitute 90% of Party membership, we can infer that at least 90% of the CCP is relatively honest. It's also clear from the results they obtain that the top level of the Party–the Steering Committee and their peers–are honest. And we know that, last year, the Party prosecuted 48,000 officials out of 80 million members. This suggests an overt corruption rate of about .06%. Not bad for a developing country whose per capita income is less than Honduras'. And..back at home...
Does it Pay to Bribe Your Government?
Estimating the Returns to "Lobbying" in the United States of America
Recent academic papers begin the formal work of proving that CEOs and giant corporations face a completely different legal system than the rest of us, one in which their vast resources are used to insure that they can safely ignore laws and rules applicable to small fry. One study looked at the influence of corporate lobbying on fraud detection.Corporate Lobbying And Fraud Detection, 46 Journal of Financial and Quantitative Analysis 1865 by Frank Yu of Barclays Global Investors and Xiaoyun Yu of Indiana University available here. From the abstract:
We find that firms’ lobbying
activities make a significant difference in fraud detection: compared to
non-lobbying firms, firms that lobby on average have a significantly lower
hazard rate of being detected for fraud, evade fraud detection 117 days longer,
and are 38% less likely to be detected by regulators. In addition, fraudulent
firms on average spend 77% more on lobbying than non-fraudulent firms, and
spend 29% more on lobbying during their fraudulent periods than during
non-fraudulent periods. The delay in detection leads to a greater distortion in
resource allocation during fraudulent periods. It also allows managers to sell
more of their shares.
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