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Abstract
It is widely believed that public finance management is a key factor in keeping the government away from corruption and fiscal misconduct. However, rules and regulations of public finance management are embedded in the macro institutional settings, and thus are subject to broader influences impacting implementation of these rules. Employing the perspective of informal institutions, this research explores how formal financial rules interact with informal rules in position-related consumption in China. It finds that financial rules are relatively weak as compared to informal rules. In order to curb extravagant position-related consumption and to achieve good governance in China, it is imperative to take informal rules into consideration when designing the anti-extravagance policy.
Notes
Acknowledgements
The early version of this paper was presented at the 5th Greater China Australia Dialogue held at National Taiwan University in November 2015. I am grateful to Professor Andrew Podger, Professor Hon S. Chan, and other participants for their comments.
Disclosure statement
The author reports no conflicts of interest. The author alone is responsible for the content and writing of this article.
Funding
This work was supported by a grant from the National Social Science Fund of China [No. 13&ZD011].
Notes on contributor
Hanyu Xiao is currently a postdoctoral fellow at Global China Studies of College of Liberal Arts and Social Sciences, City University of Hong Kong. His research interests include corruption, and public budgeting and finance.
Notes
1 See the official website of the CDIC for more information: http://www.ccdi.gov.cn/xwtt/201606/t20160620_80637.html (accessed 29 July 2016).
2 For example, see the 2015 summary in the CDIC website: http://www.ccdi.gov.cn/xwtt/201601/t20160112_72579.html (accessed 29 July 2016).
3 Gong and Xiao, “The Formation and Impact of Isomorphic Pressures,” (accepted).
4 For details of the interviewees’ information (such as administrative levels, posts and organizational types), refer to Gong and Xiao, “The Formation and Impact of Isomorphic Pressures,” (accepted).
5 MOF, “On Strengthening the Fiscal Management”.
6 Source: http://big5.china.com.cn/chinese/zhuanti/xxsb/1154431.htm (accessed 13 May 2015).
7 Source: http://society.people.com.cn/GB/1062/16973737.html (13 May 2015).
8 Source: http://zqb.cyol.com/html/2012-03/27/nw.D110000zgqnb_20120327_1-07.htm (accessed 13 May 2015).
9 Around 64.5% of the respondents are from government departments, state-owned enterprises, or public service units. Source: http://news.xinhuanet.com/politics/2011-10/11/c_122139306.htm (accessed 13 May 2015).
10 Interview with an official at the district level, Shenzhen, May 2012.
11 The unit chief is the lowest administrative rank within the bureaucratic system.
12 Yin, “When Will Three Public Expenditures Not be a Hot Topic,” 24–26.
13 Source: http://gzdaily.dayoo.com/html/2011-08/20/content_1451867.htm (accessed 13 May 2015).
14 Source: http://news.xinhuanet.com/politics/2012-08/21/c_112786812.htm (accessed 13 May 2015).
15 Source: http://www.chinanews.com/fz/2013/01-16/4493858.shtml (accessed 13 May 2015).
16 Source: http://big5.china.com.cn/chinese/zhuanti/xxsb/1154431.htm (accessed 13 May 2015).
17 See the following website for more information: http://www.southcn.com/news/gdnews/chuanmei/200306100198.htm (accessed 13 May 2015).
18 See the following websites for more details: http://finance.ifeng.com/news/macro/20130326/7822778.shtml; http://big5.china.com.cn/chinese/zhuanti/xxsb/1154431.htm (accessed 13 May 2015).
19 Source: http://cppcc.people.com.cn/GB/34957/3422068.html (accessed 13 May 2015).
20 Source: http://epaper.bjnews.com.cn/html/2012-03/08/content_322631.htm?div=0 (accessed 13 May 2015).
21 Guo, “Political Culture, Administrative System Reform and Anticorruption in China: Taking the Official Car Management Institution Reform as an Example,” 493–508; Ho, “On the Concept of Face,” 867–884. Ho, D. Y. “On the Concept of Face.” American Journal of Sociology. 81, no 4 (1976): 867–884.
22 Cope, “Assessing Rational-choice Models of Budgeting,” 598–624; Hindmoor, Rational Choice.
23 Dong et al., “Health Care Reform in China,” 493–514.
24 Andrews, “Good Government Means Different Things,” 11.
25 Ma and Ni, “Toward a Clean Government in China,” 119–138.
26 Gong and Xiao, “The Formation and Impact of Isomorphic Pressures,” (accepted).
27 North, Institutions, Institutional Change, and Economic Performance; Knight, Institutions and Social Conflict; Greenwood and Hinings, “Understanding Radical Organizational Change,” 1022–1054; Hall and Taylor, “Political Science and The Three New Institutionalisms,” 936–957.
28 Helmke and Levitsky, “Informal Institutions and Comparative Politics,” 725–740.
29 Dittmer, “Chinese Informal Politics,” 1–34.
30 Tsai and Dean, “Lifting the Veil of the CCP’s Mishu System,” 158–185.
31 Mishu (secretary) system in China consists of institutional mishu and personal mishu, support staff mainly employed in Party Committee general offices. Since mishu work closely for leading cadres and are involved in the decision-making and implementation process, they often have higher informal power than their formal positions and levels suggest.
32 Liu and Lin, “Formal and Informal Politics in the Budgeting Process,” 112–132.
33 Ma, “If You Can’t Budget, How Can You Govern?” 9–20.
34 Ma, “If You Can’t Budget, How Can You Govern?” 9–20; Ma and Ni, “Toward a Clean Government in China,” 119–138.
35 Wedeman, “Budgets, Extra-budgets, and Small Treasuries,” 489–511.
36 General Office of State Council, “Notice on Forwarding the MOF’s Suggestions,” 10 December.
37 MOF, “The (trial) Management Method,” November.
38 MOF and Ministry of Foreign Affairs, “Fiscal Management Methods of Temporary Official Overseas Trips,” 20 December.
39 General Office of CCP Central Committee and General Office of State Council, “Notice on Abandoning Central-level Officials’ Official Banquets,” 28 April; MOF, “Regulations of the Fiscal Management,” 14 May.
40 MOF, “Regulations of the Fiscal Management,” 14 May.
41 MOF, “Fiscal Management Methods of Budget and Final Reports,” 4 March.
42 General Office of CCP Central Committee and General Office of State Council, “Regulations on the Purchase and Use of Government Vehicles,” 5 September
43 General Office of State Council, “The Major Work Plan of Government Information Disclosure in 2012”. For more information, see the official website: http://www.gov.cn/zwgk/2012-05/17/content_2139583.htm (accessed 10 October 2015).
44 MOF and NAO, “Notice on Reducing Expenditures,” 10 March.
45 Lu, “Booty Socialism, Bureau-Preneurs, and the State in Transition,” 275.
46 Interview with a departmental official of a provincial Beijing Liaison Office, Beijing, May 2013.
47 Interview with a departmental official, Guangzhou, July 2012.
48 Interview with the deputy chief of a county bureau, Zhanjiang, July 2013.
49 Interview with the deputy chief of a county bureau, Zhanjiang, July 2013.
50 Interview with an official in the Bureau of Finance of a district, Guangzhou, July 2012.
51 Interview with the deputy chief of a county bureau, Zhanjiang, July 2013.
52 This figure is based on the calculation of the author. In some cases, the accurate figures related to this malpractice were not given in audit reports.
53 No further explanation on other organizations exists in official reports. However, those organizations are usually subject to the supervision of ministries.
54 Interview with the deputy chief of a county bureau, Zhanjiang, July 2012.
55 Interview with an official in the Bureau of Finance of a district, Guangzhou, July 2012.
56 Interview with a departmental official, Guangzhou, July 2012.
57 Interview with a senior official of the MOF, Beijing, May 2013.
58 Interview with an official in a provincial office, Changsha, March 2014.
59 Wu, Governing Civil Service Pay in China.
60 Interview with a departmental official, Guangzhou, July 2012; Interview with an official in a provincial office, Changsha, March 2014.
61 CDIC, “Notice on Forbidding The Purchase,” 31 October.
62 CDIC and The Mass Line Education Small Leading Group, “Notice on the Implementation of the Eight Regulations,” 3 September.
63 CDIC and The Mass Line Education Small Leading Group, “Notice on Severely Rectifying the Unhealthy Tendencies,” 22 December
64 Source: http://politics.people.com.cn/n/2014/0907/c1001-25619012.html (accessed 2 June 2015).
65 Interview with the chief of the general office of a provincial department, Changsha, March 2014.
66 Source: http://news.xinhuanet.com/politics/2014-01/19/c_119033709.htm (accessed 2 June 2015).
67 Interviews with several officials of a prefectural DIC, Zhuhai, May 2014.
68 For more information, see: http://news.163.com/13/1210/03/9FN08TGJ0001124J_all.html#p1 (accessed 2 June 2015).
69 More details, see: http://native.cnr.cn/society/201303/t20130327_512240041.shtml; http://www.chinanews.com/gn/2014/05-14/6166667.shtml (accessed 2 June 2015).
70 Nongjiale is a Chinese version of rural tourism, and it literally means ‘delights in farm guesthouses.’ However, government officials would like to use nongjiale as a way to have lavish official banquets because it is difficult to be detected.
71 Interview with a departmental official, Shanghai, October 2013.
72 Helmke and Levitsky, “Informal Institutions and Comparative Politics,” 725–740.
73 Ibid.
74 Interview with a senior official of the MOF, Beijing, May 2013; Interview with an official in a provincial office, Changsha, March 2014.
75 Helmke and Levitsky, “Informal Institutions and Comparative Politics,” 728.