Stanford University

The Origins and Dynamics of Crony Capitalism in China: Insights from 260 Cases of Collusive Corruption

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Abstract:

“Corruption in the post-Tiananmen era exhibits distinct characteristics not found in the 1980s, such as astronomical sums of money looted by officials, their family members, and their cronies in the private sector, large networks of co-conspirators, and the sale of public office. By examining the evolution of Chinese economic and political institutions since the early 1990s, we can trace the emergence of crony capitalism to two critical changes in the control of property rights of the assets owned by the state and the personnel management of the officials the ruling Communist Party. The cumulative effects of these changes have dramatically decentralized the control of public property without clarifying its ownership and granted local party chiefs unprecedented personnel power. Consequently, local political and business elites gain greater incentives and opportunities to collude with each other in looting the assets nominally owned by the state. The insights from a sample of 260 cases of corruption involving multiple officials and businessmen suggest that crony capitalism in China has given birth to a decentralized kleptocracy with its own market rules and dynamics.”

 

Speaker Bio:

minxin pei
Minxin Pei is the Tom and Margot Pritzker '72 Professor of Government and directs the Keck Center for International and Strategic Studies at Claremont McKenna College. He is also a non-resident senior fellow at the German Marshall Fund of the United States. He is the author of China’s Crony Capitalism: The Dynamics of Regime Decay (Harvard, 2016); China's Trapped Transition: The Limits of Developmental Autocracy (Harvard, 2006) and From Reform to Revolution: The Demise of Communism in China and the Soviet Union (Harvard, 1994). Pei has published in Foreign Affairs, Foreign Policy, The New York Times, The Financial Times, the Wall Street Journal, Project Syndicate, Fortune.com, Nikkei Asian Review, and many scholarly journals and edited volumes. He was a senior associate at the Carnegie Endowment for International Peace (1999-2009) and an assistant professor of politics at Princeton University (1992-1998). He received his Ph.D. in government from Harvard University in 1991.

Minxin Pei Professor of Government at Claremont McKenna College
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2016-2017 Center Orientation

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Oksenberg Conference Room

Encina Hall, 3rd floor, South

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Foreign Policy Challenges for the Next President

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What will happen when a new US president is sworn in? Michael McFaul, former US ambassador to Russia and director of the Freeman Spogli Institute for International Studies, leads a panel of faculty experts to discuss the imminent foreign policy challenges that the next president must face.

Michael McFaul

Larry Diamond

CDDRL
Stanford University
Encina Hall, C147
616 Jane Stanford Way
Stanford, CA 94305-6055

(650) 724-6448 (650) 723-1928
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Mosbacher Senior Fellow in Global Democracy at the Freeman Spogli Institute for International Studies
William L. Clayton Senior Fellow at the Hoover Institution
Professor, by courtesy, of Political Science and Sociology
diamond_encina_hall.png MA, PhD

Larry Diamond is the William L. Clayton Senior Fellow at the Hoover Institution, the Mosbacher Senior Fellow in Global Democracy at the Freeman Spogli Institute for International Studies (FSI), and a Bass University Fellow in Undergraduate Education at Stanford University. He is also professor by courtesy of Political Science and Sociology at Stanford, where he lectures and teaches courses on democracy (including an online course on EdX). At the Hoover Institution, he co-leads the Project on Taiwan in the Indo-Pacific Region and participates in the Project on the U.S., China, and the World. At FSI, he is among the core faculty of the Center on Democracy, Development and the Rule of Law, which he directed for six and a half years. He leads FSI’s Israel Studies Program and is a member of the Program on Arab Reform and Development. He also co-leads the Global Digital Policy Incubator, based at FSI’s Cyber Policy Center. He served for 32 years as founding co-editor of the Journal of Democracy.

Diamond’s research focuses on global trends affecting freedom and democracy and on U.S. and international policies to defend and advance democracy. His book, Ill Winds: Saving Democracy from Russian Rage, Chinese Ambition, and American Complacency, analyzes the challenges confronting liberal democracy in the United States and around the world at this potential “hinge in history,” and offers an agenda for strengthening and defending democracy at home and abroad.  A paperback edition with a new preface was released by Penguin in April 2020. His other books include: In Search of Democracy (2016), The Spirit of Democracy (2008), Developing Democracy: Toward Consolidation (1999), Promoting Democracy in the 1990s (1995), and Class, Ethnicity, and Democracy in Nigeria (1989). He has edited or coedited more than fifty books, including China’s Influence and American Interests (2019, with Orville Schell), Silicon Triangle: The United States, China, Taiwan the Global Semiconductor Security (2023, with James O. Ellis Jr. and Orville Schell), and The Troubling State of India’s Democracy (2024, with Sumit Ganguly and Dinsha Mistree).

During 2002–03, Diamond served as a consultant to the US Agency for International Development (USAID) and was a contributing author of its report, Foreign Aid in the National Interest. He has advised and lectured to universities and think tanks around the world, and to the World Bank, the United Nations, the State Department, and other organizations dealing with governance and development. During the first three months of 2004, Diamond served as a senior adviser on governance to the Coalition Provisional Authority in Baghdad. His 2005 book, Squandered Victory: The American Occupation and the Bungled Effort to Bring Democracy to Iraq, was one of the first books to critically analyze America's postwar engagement in Iraq.

Among Diamond’s other edited books are Democracy in Decline?; Democratization and Authoritarianism in the Arab World; Will China Democratize?; and Liberation Technology: Social Media and the Struggle for Democracy, all edited with Marc F. Plattner; and Politics and Culture in Contemporary Iran, with Abbas Milani. With Juan J. Linz and Seymour Martin Lipset, he edited the series, Democracy in Developing Countries, which helped to shape a new generation of comparative study of democratic development.

Download full-resolution headshot; photo credit: Rod Searcey.

Former Director of the Center on Democracy, Development and the Rule of Law
Faculty Chair, Jan Koum Israel Studies Program
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Abbas Milani

615 Crothers Way,
Encina Commons, Room 128A
Stanford University
Stanford, CA 94305

(650) 721-4052
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Research Fellow, Hoover Institution
abbas_milani_photo_by_babak_payami.jpg PhD

Abbas Milani is the Hamid and Christina Moghadam Director of Iranian Studies at Stanford University and a visiting professor in the department of political science. In addition, Dr. Milani is a research fellow and co-director of the Iran Democracy Project at the Hoover Institution.

Prior to coming to Stanford, Milani was a professor of history and political science and chair of the department at Notre Dame de Namur University and a research fellow at the Institute of International Studies at the University of California at Berkeley. Milani was an assistant professor in the faculty of law and political science at Tehran University and a member of the board of directors of Tehran University's Center for International Studies from 1979 to 1987. He was a research fellow at the Iranian Center for Social Research from 1977 to 1978 and an assistant professor at the National University of Iran from 1975 to 1977.

Dr. Milani is the author of Eminent Persians: Men and Women Who Made Modern Iran, 1941-1979, (Syracuse University Press, Syracuse, NY, 2 volumes, November, 2008); King of Shadows: Essays on Iran's Encounter with Modernity, Persian text published in the U.S. (Ketab Corp., Spring 2005); Lost Wisdom: Rethinking Persian Modernity in Iran, (Mage 2004); The Persian Sphinx: Amir Abbas Hoveyda and the Riddle of the Iranian Revolution (Mage, 2000); Modernity and Its Foes in Iran (Gardon Press, 1998); Tales of Two Cities: A Persian Memoir (Mage 1996); On Democracy and Socialism, a collection of articles coauthored with Faramarz Tabrizi (Pars Press, 1987); and Malraux and the Tragic Vision (Agah Press, 1982). Milani has also translated numerous books and articles into Persian and English.

Milani received his BA in political science and economics from the University of California at Berkeley in 1970 and his PhD in political science from the University of Hawaii in 1974.

Hamid and Christina Moghadam Director of Iranian Studies
Co-director of the Iran Democracy Project
CDDRL Affiliated Scholar
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Amy Zegart

CISAC
Stanford University
Encina Hall, E216
Stanford, CA 94305-6165

(650) 725-9754 (650) 723-0089
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Senior Fellow at the Freeman Spogli Institute for International Studies
Morris Arnold and Nona Jean Cox Senior Fellow at the Hoover Institution
Senior Fellow at the Stanford Institute for Human-Centered AI
Professor, by courtesy, of Political Science
amyzegart-9.jpg PhD

Dr. Amy Zegart is the Morris Arnold and Nona Jean Cox Senior Fellow at the Hoover Institution. The author of five books, she specializes in U.S. intelligence, emerging technologies, and national security. At Hoover, she leads the Technology Policy Accelerator and the Oster National Security Affairs Fellows Program. She also is an associate director and senior fellow at the Stanford Institute for Human-Centered AI; a senior fellow at the Freeman Spogli Institute; and professor of political science by courtesy, teaching 100 students each year about how emerging technologies are transforming espionage.

Her award-winning research includes the leading academic study of intelligence failures before 9/11: Spying Blind: The CIA, the FBI, and the Origins of 9/11 (Princeton, 2007) and the bestseller Spies, Lies, and Algorithms: The History and Future of American Intelligence (Princeton, 2022), which was nominated by Princeton University Press for the Pulitzer Prize. She also coauthored Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity, with Condoleezza Rice (Twelve, 2018). Her op-eds and essays have appeared in Foreign Affairs, Politico, the New York Times, the Washington Post, and the Wall Street Journal.

Zegart has advised senior officials about intelligence and foreign policy for more than two decades. She served on the National Security Council staff and as a presidential campaign foreign policy advisor and has testified before numerous congressional committees. Before her academic career, she spent several years as a McKinsey & Company consultant.

Zegart received an AB in East Asian studies from Harvard and an MA and a PhD in political science from Stanford. She serves on the boards of the Council on Foreign Relations, Kratos Defense & Security Solutions, and the American Funds/Capital Group.

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Panel Discussions

16th Korea-U.S West Coast Strategic Forum

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In this sixteenth session of the Strategic Forum, former senior American and South Korean government officials and other leading experts will discuss current developments in the Korean Peninsula and North Korea policy, the future of the U.S.-South Korean alliance, and a strategic vision for Northeast Asia. The session is hosted by the Korea Program in association with The Sejong Institute, a top South Korean think tank.

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Korea-U.S. West Coast Strategic Forum

Koret Foundation extends support for Korean studies at Shorenstein Asia-Pacific Research Center

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The Koret Foundation of San Francisco has extended its gift to Stanford’s Shorenstein Asia-Pacific Research Center (APARC) in support of contemporary Korean studies.

Two more years have been added to a three-year gift awarded to the Center in 2015, totaling to 12 years of lifetime support from the Foundation, whose mission is to endow scholarly solutions to community problems and to invest in leading institutions that serve as levers for achieving impact.

The gifts have allowed the Center to bring eminent professionals from Asia and the United States to Stanford for an annual fellowship and an annual international conference known as the Koret Workshop, all of which aims to promote greater understanding and closer ties between Korea and the United States.

“The Koret Foundation’s gift represents its commitment to strengthening research and finding solutions to challenges in Korea and the United States,” said Shorenstein APARC Director Gi-Wook Shin. “Their support over the past eight years has enabled our Korea Program to invite numerous visiting scholars, offer new courses to students, and foster important conversations in the Bay Area community and beyond. We greatly value our relationship with the Foundation and thank them for their enduring generosity.”

Since 2008, eight Koret fellows have conducted research at the Center, many public seminars have been held, and each workshop has yielded a book published by Shorenstein APARC and the Brookings Institution Press.

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Incentives key to China’s effort to upgrade higher education, Stanford expert says

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Clifton Parker of the Stanford Report writes about REAP's core researcher, Prashant Loyalka's latest findings on China's higher education system. Read the original article from Stanford News.

 

China can improve its higher education system by introducing incentives for students and teachers so they take learning more seriously, a Stanford professor says. Under the current system, college students are essentially guaranteed a diploma, offering little motivation to excel.

Prashant Loyalka, a center research fellow at the Rural Education Action Program in the Freeman Spogli Institute for International Studies, led a forthcoming study that found that Chinese college freshmen in computer science and engineering programs began with academic and critical thinking skills about two to three years ahead of their peers in the United States and Russia, but showed almost no improvement in such skills after two years of college. Critical thinking skills are typically defined as the ability to make clear and well-reasoned analyses and evaluations of information.

Loyalka, also an assistant research professor at Stanford Graduate School of Education, recently published an article on how teacher incentives boost student learning in China’s primary schools. Some of the findings could be applicable to China’s universities, he said.

Stanford News Service recently interviewed Loyalka:

 

What are the strengths of the Chinese educational system?

China’s education system is strong in many ways. By the end of junior high school and high school, students in urban areas display high levels of academic skills like math, science, language arts and English. They also show very high levels of higher-order thinking skills, such as critical thinking and quantitative reasoning. Students from both urban and rural areas tend to be incredibly hardworking and disciplined as well. This is partly due to the fact that Chinese students and their parents spend a lot of time and resources on their studies, both inside and outside of school.

Policymakers in China have also done a great job universalizing access to primary school and getting kids to at least start junior high school.

The weaknesses?

Perhaps the most glaring weakness is that the quality of education is low for the millions of kids who live in rural China. The majority of students in rural China are unlikely to complete high school. About one-third drop out of junior high school. Furthermore, the vast majority of students also do not appear to learn very much after primary school. China shuttles millions of rural kids into vocational high schools that, as several of our studies show, fail to build students’ cognitive and non-cognitive abilities.

Another big weakness is that students, on average, do not improve their academic or high-order thinking skills during college. One of the reasons for this could be that students are essentially guaranteed to graduate college on time and correspondingly have few incentives to work hard during college.

What are the main highlights of your forthcoming study?

In 2014, I led a pilot study to measure the skill levels and gains of engineering and computer science students in China, Russia and the United States. Entering university freshmen in China were roughly three years ahead of U.S. students in critical-thinking skills and roughly two years ahead of Russian students in critical thinking, math and physics skills.

After two years of study, students in the U.S. and Russia closed about half the skill gap with students in China.

The reduction in the skills gap between countries was due to the fact that while U.S. and Russian students made positive skill gains, Chinese students made no skill gains over two years.

I am now in the midst of conducting a much larger study, using nationally random, representative samples of engineering and computer science students in China, Russia and other developed and developing countries. The goals of the study are not just to measure how much students learn in university, but even more to explain what types of factors can contribute to increases in learning.

Why are China’s high schools doing better than their colleges?

Students in China have to study extremely hard if they want to go to college. There are a limited number of spots in academic high schools and colleges, and students have to pass highly competitive exams to get into each level of schooling. In order to prepare students for college, academic high schools offer a rigorous curriculum in math, science, Chinese and English. Academic high school administrators and teachers maintain a highly disciplined environment in which students study long hours in school and do lots of homework and tutoring outside of school. Academic high school teachers are also highly incentivized to make sure students do well.

What are some possible reforms?

China may wish to consider introducing a series of incentives into universities that make students take learning, and faculty take teaching, even more seriously. For faculty, incentives that reward better teaching and are linked to promotion and pay may be needed.

For students, it is likely that they need more incentives to study their course material during college. The vast majority of students do not have significant pressure to show that they learned the course material. They are given a “pass” for their different courses no matter whether they learned the material or not; they also almost all graduate after four years. By contrast, the graduation rates for STEM [science, technology, engineering and math] majors in the U.S. are much lower.

China could also revisit its university curricula and instruction. If, for example, as our study shows, engineering students are already equipped with high levels of math and physics skills before they enter university, offering a more diverse liberal arts curriculum may be a more cost-effective use of resources. Instruction in universities also tends to be passive and rote – students at the university level would likely benefit from a more dynamic interaction with professors than they currently have.

How does the Chinese leadership view education’s impact on the national economy?

China’s leaders are clear that the health of the national economy is tied to the health of its education system. At this point, they appear especially open to improving the quality of higher education. I believe that a lot of attention could continue to be paid to improving the quality of education in rural areas, however, and also expanding access to academic high school and college for rural students.

 

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Prashant Loyalka says that China’s education system is strong in many ways, but shows weaknesses at the college level. | Paul Burns / Getty Images
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SCPKU Doctoral Fellows Lunch Talk

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Joint Presentation

DESIGN UNDER UNCERTAINTY: APPLICATIONS IN AIRCRAFT DESIGN AND WATER RESOURCES

Rick Walter Fenrich, Aeronautics & Astronautics Department, Stanford University

What do stock market investments and aircraft design have in common? They both contain uncertainties! For example, one can never be sure of next year's stock returns or exactly what weather an aircraft will fly in. Despite their differences, in fact both disciplines can use similar techniques to manage their uncertainties. Engineers can use these techniques to make predictions about the behavior of the stock market or aircraft performance, leading to savings in time, saving (or making) money, and in the case of aircraft design, confidently achieving a required level of safety. His research seeks to advance these techniques and integrate them with optimization methods used in design. Rick is also expanding my application area to water resources engineering at Peking University.

COMMUNICATING WITH LIGHT ON COMPUTER CHIPS

Colleen Shang Fenrich, Department of Materials Science and Engineering, Stanford University

Light has been used for centuries as a mode of communication between people such as by light houses, signal lamps, or even mirrors reflecting the sunlight. Recently, light has also revolutionized the world of telecommunications by transmitting our long-distance telephone calls, Internet traffic, and cable TV signals. However, one area in which light can still make significant advances is the communication of information between or within computer chips, otherwise known as the field of "silicon photonics," which can reduce power dissipation and increase speed in computer chips. Her research seeks to answer how to first generate light on computer chips.

REGISTRATION:

Email: sanjiu39@stanford.edu; Tel: 10-62744163

Lunch will be provided for those who have registered one day before the presentation

 

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STANFORD CENTER AT PEKING UNIVERSITY

  The Lee Jung Sen Building, Langrun Yuan, Peking University

  Please bring a photo ID and enter Peking University through the NE Gate.

  Pre-registration for vehicle entrance inside the campus is required.  

  Please note there are no parking spaces outside the Center.

 

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Introducing CDDRL's incoming pre- and postdoctoral fellows

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Stanford University’s Center on Democracy, Development and the Rule of Law (CDDRL) is proud to announce our four incoming fellows who will be joining us in the 2016-2017 academic year to develop their research, engage with faculty and tap into our diverse scholarly community. 

The pre- and postdoctoral program will provide fellows the time to focus on research and data analysis as they work to finalize and publish their dissertation research, while connecting with resident faculty and research staff at CDDRL. 

Fellows will present their research during our weekly research seminar series and an array of scholarly events and conferences.

Topics of the incoming cohort include electoral fraud in Russia, how the elite class impacts state power in China, the role of emotions in support for democracy in Zimbabwe, and market institutions in Nigeria. 

Learn more in the Q&A below.

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Natalia Forrat

CDDRL Pre-Doctoral Fellow

Hometown: Tomsk, Russia

Academic Institution: Northwestern University

Discipline and expected date of graduation: Sociology, April 2017

Research Interests: authoritarianism, state capacity, social policy, civil society, trust, Russia and post-communist countries

Dissertation Title: The State that Betrays the Trust: Infrastructural State Power, Public Sector Organizations, and Authoritarian Resilience in Putin's Russia

What attracted you to the CDDRL Pre/post-doctoral program? I study the connection between state capacity and political regimes - the topic that is at the core of many research initiatives at CDDRL. Learning more about this work and receiving feedback for my dissertation will enrich and sharpen my analysis, while helping me to place it into a comparative context. I am looking forward to discussing my work with the faculty who study the post-Soviet region. I also will explore policy implications of my work with the help of policy experts at CDDRL.

What do you hope to accomplish during your nine-month residency at the CDDRL? Besides finishing writing my dissertation, I will workshop three working papers to prepare them for publication. The first one argues that Putin's regime used the school system to administer a large-scale electoral fraud in 2012 presidential elections; the second one shows how the networks of social organizations were used by subnational autocrats to strengthen the regime; and the third one will look at the factors that make the abuse of such organizations more difficult in some regions. In addition to these papers I will continue developing my post-graduation research project exploring the relationship between social trust and distrust, institutions, political competition, and democratization.

Fun fact: I have spent 25 years of my life in Siberia, and I can tell you: Chicago winters are worse!

 
 

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Shelby Grossman

CDDRL Postdoctoral Fellow

Hometown: Reading, MA

Academic Institution: Harvard University

Discipline & Graduation Date:  Government, Summer 2016

Research interests: political economy of development, private governance, market institutions, Sub-Saharan Africa, survey methods

Dissertation Title: The Politics of Order in Informal Markets: Evidence from Lagos

What attracted you to the CDDRL post-doctoral program? I was attracted to CDDRL largely for its community of scholars. Affiliated faculty work on the political economy of development and medieval and modern market institutions, topics that are tied to my own interests.

What do you hope to accomplish during your nine-month residency at the CDDRL? I plan to prepare a book manuscript based on my dissertation, a project that explains variation in the provision of pro-trade institutions in private market organizations through the study of physical marketplaces in Nigeria. In addition, I will continue to remotely manage an on-going project in Nigeria (with Meredith Startz) investigating whether reputation alleviates contracting frictions. I also plan to work on submitting to journals a few working papers, including one on the politics of non-compliance with polio vaccination in Nigeria (with Jonathan Phillips and Leah Rosenzweig). 

Fun fact: Contrary to popular belief, not all cheese is vegetarian. I have a website to help people determine if a cheese is vegetarian or not: IsThisCheeseVegetarian.com. 

 
 

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Daniel Mattingly

CDDRL Postdoctoral Fellow

Hometown: Oakland, California

Academic Institution: University of California, Berkeley

Discipline & Graduation Date: Political Science, Summer 2016

Research Interests: Governance, rule of law, state building, authoritarian politics, Chinese politics

Dissertation Title: The Social Origins of State Power: Democratic Institutions and Local Elites in China

What attracted you to CDDRL?  The Center has a fantastic community of scholars and practitioners who work on the areas that I'm interested in, including governance and the rule of law. I'm excited to learn from the CDDRL community and participate in the Center's events. The fellowship also provides me with valuable time to finish my book manuscript before I start teaching.

What do you hope to accomplish during your nine-month residency at the CDDRL? While at CDDRL, I plan to prepare my book manuscript and to work on some related projects on local elites and state power in China and elsewhere. 

Fun fact: I grew up on an organic farm in Vermont.

 
 

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Lauren E. Young

CDDRL Postdoctoral Fellow

Hometown: Saratoga, CA

Academic Institution: Columbia University 

Discipline & Graduation Date: Political Science (Comparative Politics, Methods), May 2016 (defense), Oct 2016 (degree conferral)

Research Interests: political violence, political economy of development, autocratic persistence, democratization, protest, electoral violence

Dissertation Title: The Psychology of Repression and Dissent in Autocracy

What attracted you to the CDDRL post-doctoral program? As a graduate of the CISAC honors program when I was an undergraduate at Stanford, I have seen first-hand how intellectually stimulating, collaborative, and plugged into policy CDDRL is. While at the center I will be revising my dissertation work on the political psychology of participation in pro-democracy movements in Zimbabwe for submission as a book manuscript, and moving forward new projects that similarly seek to understand how different forms of violence by non-state actors affects citizens' preferences and decision-making. Because of its deep bench of experts on autocracy, narco-trafficking, and insurgency, CDDRL will add enormous value to these projects.

What do you hope to accomplish during your nine-month residency at the CDDRL?  During my fellowship year, my primary goal is to revise my research on Zimbabwe into a book manuscript. I defended my dissertation as three stand-alone articles, including two experiments showing that emotions influence whether opposition supporters in Zimbabwe express their pro-democracy preferences and a descriptive paper showing that repression has a larger effect on the behavior of the poor. To prepare the book manuscript during my fellowship, I will bring in additional quantitative and qualitative descriptive evidence and tie the three papers together into a cohesive argument about how opposition supporters make decisions about participation in protest, why emotions have such a large effect on these decisions, and how this affects variation across individuals and the strategic choices of autocrats and activists.

Fun fact: During my fieldwork I took an overnight train from Victoria Falls to a southern city in Zimbabwe and hitch-hiked into a national park. It got a little nerve-wracking when night started to fall, but ended with  an invitation to a barbecue! 

 

 
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