Chen Lin, Randall Morck, Bernard Yeung, Xiaofeng Zhao, 22 December 2017

Chinese stocks rose sharply overall on news of President’s Xi’s 2012 policy cracking down on corruption, but non-state-owned enterprises in the country’s least liberalised provinces actually lost value. This column argues that China has taught the world something interesting – that prior market liberalisation makes anticorruption reforms more valuable. Once market forces are activated, bribe-hungry officials no longer grease the wheels but instead become pests and invite eradication.

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