Does Increased Civil Service Pay Deter Corruption? Evidence from China

Abstract

The temporal persistence and geographical prevalence of corruption in the world have provoked a vast amount of research into its causes. Low civil service remuneration, especially in less developed nations, is believed to be an important contributing factor to corruption. The assumption is that when salaries are low but expectations for service remains high, government officials may demand more compensation from informal or even illegal channels than what is officially sanctioned; hence, corruption arises. Accordingly, increased pay level is assumed to be effective in deterring corruption. Using China as a case, we argue that the relationship between civil service pay and corruption is not as simple as suggested. The empirical evidence gathered from China casts doubt on the assumed connection between the two to debunk the myth that increasing civil service pay contributes to the control of corruption. The article also presents the policy implications of the above analysis for human resource management and civil service governance.