A Network-Exchange Approach to Corruption: Brokers and Institution Spanning in A Chinese Corruption Network

ABSTRACT

Corruption schemes and operations have increasingly taken on networked features. Building on insights from Social Exchange Theory and Relational Sociology, this article seeks to construct a network-exchange approach to analyze the structure and operation of corruption networks. Using a Chinese corruption network that involved 161 connected individuals as a strategic case, this article shows that corruption networks expand by spanning institutions and enlisting strategic resource holders through brokerage activities. Four types of brokerage situations are found in the context of Chinese political economy: frequently transferred officials spanning bureaucratic jurisdictions, private entrepreneurs bridging different groups of officials, relatives of officials connecting officials and private entrepreneurs, and managers of state-owned enterprise going between the public and private sector. I show that while the institutional locations of brokers and their partners affected the specific kinds of goods being exchanged, all four boundary-spanning activities relied on longstanding dyadic exchange, a heterogeneity of goods, and an informal rule of reciprocity to maintain relationships and stabilize transactions. By uncovering the network construction of incentives, power, and organizations, this article seeks to develop insights and implications for the prosecution and prevention of corruption.

Acknowledgments

This paper would like to thank Andrew Shrank, Emily Erikson, Nicholas Hoover Wilson, Yahong Zhang, and David Jancsics for their helpful comments and suggestions.

Notes

¹ James Char, “A Turning Point in China’s Anti-Graft Campaign,” Diplomat, January 11, 2015; Li, Mo, “Zhou Yongkang to be Cellmate of Bo Xilai in Qinchen Prison,” Neimu, Vol. 28, April 22, 2014.

² Although the campaign is an ongoing and intended long-term project, it is widely believed that the campaign by this month has completed scrutinizing the highest level of the bureaucracy and passed its peak. See Cao, Yuhai and Wang, Xiuwei, “To Maintain the Purity of the Party through Enhancing Institutional Construction of Combating Corruption and Building a Clean Government,” People’s Daily, October 24, 2012.

³ “Chinese Communist Party Disciplinary Sanction Ordinance,” a new edition issued by the Central Committee of the CCP in October, 2015, reemphasized that “banding together in gangs, forming cliques for private ends, or forming factions” is not permitted within the party.

⁴ Wang, Shu.“How were These Thirteen Fallen Officials Related to Zhou Yongkang,”Beijing News, November 24, 2015.

⁵ Yu, Ning et al, “Zhou Yongkang’s Three Cornerstones: Oil, Sichuan, and the Political and Legal Affairs Commission,” Caixin, July 9, 2014.

⁶ “Uncover The Red and The Black of the Ling Family”, China Business Journal, December 23, 2014.

⁷ “Party Secretory of a City Falling off the Horse in the Midst of Rumors,” Beijing Youth Daily, January, 6, 2015.

⁸ “Revealing the Motivation of Liu Zhijin in Helping Ding Shumiao: Helping Broadening His Career,” The Beijing News, August, 9, 2012.

⁹ Pan, Zefu et al, “Zhou Yongkang’s Brother Circle in Sichuan: Li Chencheng, Li CHongxi, Ji Wenlin, Tan Li, Liu Han,” The Paper, July 30, 2014. Accessed at http://www.thepaper.cn/newsDetail_forward_1254823.

¹⁰ Businessman Liu Han’s relationship with Zhou Bin, official Zhou Yongkang’s son, illustrated well the exchange of favors on a full spectrum. Liu took over Zhou’s many souring business ventures. In return, Zhou ushered Liu into businesses with high entry barriers like minerals and land development. Using his father’s power, Zhou also helped Liu get clear of criminal charges. “Wife and Brother-in-law Have been Taken Away for Investigation, Ling Jihua Encounter a Fatal Blow,” Boxun News, September 6, 2016. Accessed at http://news.boxun.com/news/gb/china/2012/12/201212060332.shtml#.V92gixZvpqs.

¹¹ According to “Criterion on Clean Governance For Chinese Communist Party Cadres,” issued by the Central Committee of the CCP in February 2010 .

¹² Xu, Qianchuan, et al, “Liu Han’s Circle of Friends,” Caijing, April 7, 2014.

¹³ Id; “Tan Li’s Fraternal Circle: Li Chuncheng, Li Chongxi, Ji Wenlin, and Liu Han,” Caijing, July 9, 2014.

¹⁴ Gao, Xin, and Zhou, Lingru, “ ‘Nominal Kinship’ Has Become Hotbed of Corruption,” The Procutoratorate Daily, Auguest 18, 2015.

¹⁵ Zhou Liping, et al, “Establishing Nominal Kinship, ”Clean Government Outlook, 2015 September.

¹⁶ Wu, Hongyueran, and Luo, Jieqi, “The Dark Exchange Between Liu Han and China Minmetals and Nonferrous Metals Co.,” Caixin, February 25, 2014.

Additional information

Notes on contributors

Yingyao Wang

Yingyao Wang is Assistant Professor at the Department of Sociology at the University of Virginia. Her research interests include bureaucracy, foreign direct investment from emergent economies, corruption, tax evasion, and economic reforms.