Collusive corruption in public services: evidence from Chinese state corruption audits

This study investigates the collusive bureaucrat-business relationship in the transitional emerging economy of China. Based on a sample of 334 reported corruption audits manually collected from the online official public resources of the Chinese National Audit Office (CNAO), logistic regression tests are run to test the main effects under investigation and the moderating role of two institutional factors. The test results reveal that the likelihood of bureaucrat-business collusive corruption is positively correlated to the level of the corruption perpetrator's political ranking; that corruptions in group are more likely to be collusive than those by individuals, and that public services involving governmental approval and authorization over businesses are more likely to corrupt collusively than those involving the mere provision of governmental governance. This study also proves the significant moderating role of GDP as an economic-political institutional measure, and REGION, as a socio-political institutional measure, on the correlation between collusive corruption and the political ranking of corruption perpetrators. Specifically, a weak institutional framework may encourage higher-ranking officials to commit bureaucrat-business collusive corruption crime. This study makes three unique contributions to existing anti-corruption and auditing studies. First, it sheds light on the collusive nature of bureaucratic corruption. Second, it brings institutional factors into the investigation of the bureaucrat-business collusive corruption. Finally, it links anti-corruption efforts and state audits, which lead to a better understanding of the role played by state audits in China's newly-launched anti-corruption campaign.