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| Urbanization, Transfer Payments and Local Bureaucratic Corruption |
| LUO Ye-xiao, DUAN Long-long |
| College of Economics and Management, Southwest Jiaotong University, Chengdu, Sichuan, 610031 |
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Abstract The longitudinal transfer payment system and new urbanization strategy have noticeable impact on China’s local corruption. This paper, based on spatial perspective and SPD maximum likelihood estimation method, makes an in-depth discussion of the relationship between urbanization, transfer payments and local corruption in thirty one provinces,autonomous regions and municipalities from 2000 to 2013. What the empirical study suggests are as follows: urbanization fosters corruption by enhancing “infrastructure investment?” impulse of local bureaucrats and reducing the cost to attract investment in adjacent regions; central transfer payments to local governments facilitate the corruption of local bureaucrats as they have significant territorial “flypaper” effect and spatial spillover effect; transfer payments increase the motives for rent-seeking with power due to regional “achievement competition”, though they directly meet the need of urbanization and help restrain local corruption by “yardstick competition” order. In view of various causes for corruption, it is more important to constrain the fiscal factors directly related to the behavior of local governments.
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Received: 04 February 2016
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2016, Vol. 33 
