Anticorruption Crackdown in China Hurts Bureaucracy Talent Pool

China's push to eliminate corruption may unintentionally harm bureaucratic quality through adverse selection effects.

The Core Argument: Corruption serves as an informal talent incentive, attracting skilled officials. Anti-corruption efforts that reduce rent-seeking opportunities could lower recruitment standards and change candidate demographics.

• Methodology: Researchers used a nationwide survey of Chinese government officials combined with exogenous variations in enforcement levels created by recent anticorruption campaigns.
• Key Findings:
• Intensified anti-corruption enforcement lowers the average ability of newly recruited bureaucrats (deterrence effect).
• It discourages entry from lower socioeconomic groups while favoring affluent and well-connected candidates (compositional effect).
• Why This Matters: These findings reveal hidden human capital costs associated with corruption elimination, particularly in developing nations like China.

The study shows how policies targeting corruption can have unintended selection consequences across different levels of government.