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Abstract
Despite severe punishments such as the death penalty, corruption is not effectively deterred in China. This research discusses the ineffective deterrence of corruption from a game-theoretic perspective. I first form a corruption-investigation game based on Tsebelis's model on crimes and sanctions. Next I extend the basic model by linking the two players' payoffs. Finally, I construct a static game of incomplete information by considering different types of investigator. With the unique advantage of game theory, this research finds that to deter corruption, (1) simply increasing the penalty can counterintuitively decrease the frequency of investigation; (2) it is important to promote incentives for the investigator, such as rewarding anticorruption monetarily or politically; and (3) it is also important to maintain a sufficient proportion of officials who have incentives to fight corruption.
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Corruption, commonly defined as the "sale of government property for personal gain," is a persistent problem in many countries.1 Sometimes corruption does not show a clear trend of decline, even though government has proclaimed a war against it by enacting new laws and punishing the transgressors severely. In China, numerous rules and regulations covering a wide range of corruption activities have been passed at the central and local levels in recent years. China is also among the few countries that have imposed the death penalty for criminals convicted of corruption. Using this extreme penalty, the Chinese government hopes to show its resolve against corruption. However, it is widely argued that corruption in China has grown more sophisticated and includes more senior officials and larger sums.2 Why doesn't severe punishment, such as the death penalty, discourage corruption effectively?
Existing research mainly attributes the ineffective deterrence of corruption to the lack of rule of law in China. Briefly, it is argued that the power concentration of the Chinese Communist Party (CCP) makes anticorruption agencies dependent on the party, resulting in lax enforcement of the law. Therefore, harsh punishment of corruption is not intimidating, especially to well-connected and powerful officials.3 It is undeniable that the credibility of law enforcement is a crucial problem for anticorruption in China. However, a question leftunanswered is this: Even with credible enforcement, would severe punishment deter corruption effectively? Answers to this question are important for improving...