The curse of spanning over millennium: Confucian culture and corruption in China

Over the past millennium, Confucian culture has prevailed in China as a typical informal institution, especially its emphasis on human feelings and interpersonal connections (guanxi) that coincides with the incentives for corruption. In this paper, we test the hypothesis that Confucian culture can generate positive effects on the formation of bureaucratic corruption in China. Using the variation in the number of jinshi across Chinese cities as a proxy for the degree of Confucian culture, and using the number of bribery recipients to measure corruption, we find that regions with more jinshi are associated with more bribe recipients. To address the endogeneity, we employ the Confucian sages in a given city as our instrumental variable. The instrumented results are consistent with our baseline claim. The findings remain robust after using a variety of tests, including using the percentage of bribe recipients instead of the number of bribe recipients, using the number of Confucius temples, Confucian academies and chaste women as alternative Confucian cultural measures, and controlling the impact of the North-South differences. In addition, we find the shock of foreign culture can mitigate the positive effect of Confucian culture on corruption. Finally, mechanism shows that the effect of Confucian culture on corruption can be attributed to the attitudes towards income unfairness, the excessive pursuit of vanity and the emphasis on interpersonal connections.