Rent-seeking and economic governance in the structural nexus of corruption in China

This article examines the sources of widespread rent-seeking practices and their relations to corruption in China. It argues that rent-creation and seeking are difficult to eliminate because they have become institutionalized as the constitutive parts of economic governance. Using case studies drawn from a number of industrial sectors, this study shows that the creation and allocation of economic rents has become a major policy instrument used by various levels of governments to manoeuvre industrial plans and development priorities. At the same time, the discretionary power exercised by state agents in implementing development priorities has created mounting opportunities for exchanging rents with bribes. The result is a structural nexus between economic governance, rent-seeking and corruption that defy administrative measures aiming at achieving a clean government in China.