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Title:: Corruption and Chinese Economic Growth: Social Basis for Corruption Control

Abstract:: Based on the panel data of China’s 31 provinces during 2002-2011, we conducted a theoretical analysis of and an empirical testing on factors which affect China’s corruption and the relationship between its corruption and economic growth. Our results show that: on the one hand, the impact of people’s education level and public servants’ income on China’s corruption is consistent and significant; on the other hand, fiscal decentralization, the size of government, the level of investment and GDP growth rate have inconsistent and insignificant effects on corruption. China’s rapid economic growth comes mainly from human capital growth driven by the demographic dividend and the increase of fixed capital investment which arises from reform and opening up rather than corruption. The relationship between China’s corruption and economic growth is highly complex. There is no significant econometric relationship between them, not to mention a bound causality. In the final section, we will offer some policy recommendations for fighting corruption. Abandoning the theory of regarding reform-based institutionalized mechanisms as panacea, which is insufficient for controlling corruption, we argue that the educational roles played by such non-institutionalized mechanisms as education and religion for fighting corruption cannot be ignored.