Linking anticorruption threats, performance pay, administrative outputs, and policy outcomes in China
| DOI | http://doi.org/10.1111/padm.12562 |
| Author | Jiaqi Liang,Laura Langbein |
| Published date | 01 March 2019 |
| Date | 01 March 2019 |
ORIGINAL ARTICLE
Linking anticorruption threats, performance pay,
administrative outputs, and policy outcomes
in China
Jiaqi Liang
1
| Laura Langbein
2
1
Department of Public Administration,
University of Illinois at Chicago, Chicago, USA
2
Department of Public Administration and
Policy, American University, Washington,
DC, USA
Correspondence
Laura Langbein, Department of Public
Administration and Policy, American
University, 4400 Massachusetts Av. NW,
Washington, DC 20016, USA.
Email: langbei@american.edu
Little is known about the effects of two prominent public sector
reforms—anticorruption efforts and high-powered incentive
systems—on the accomplishment of policy goals in the absence of
the rule of law and in the presence of an extrinsic incentive to take
advantage of corruption to achieve performance targets. This study
explores how performance rewards and anticorruption efforts
jointly affect administrative outputs and policy outcomes. We
examine China’s air pollution control policy with province-level
panel data. The analysis shows that performance rewards prompt
administrative outputs that are linked to the incentive structure.
Anticorruption activities have small significant, positive effects on
those outputs only prior to the inception of high-powered rewards,
but have no significant effect on policy outcomes, regardless of the
measure. The introduction of performance incentives contributes
to the achievement of policy outcomes only when their measure-
ment is subject to government manipulation.
1|INTRODUCTION
Anticorruption efforts and performance management are two prominent reforms of public administration (Bouckaert
and Halligan 2008; Moynihan et al. 2011; Neshkova and Rosenbaum 2015; Zhang and Lavena 2015). Whether and
how anticorruption activities in the public sector shape policy outcomes is still unclear, especially in the global con-
text where corruption is common in some countries (Yang 2009). Further, little research examines how anticorrup-
tion efforts, which highlight the threat of punishment, and performance incentives, which highlight the possibility of
rewards, jointly affect the achievement of policy goals. Especially in settings where the rule of law is not well estab-
lished, the promise of high-powered rewards for performance can induce demands to take advantage of corruption
to accomplish policy goals. Alternatively, the two can be substitutes: the promise of high-powered rewards can
replace the use of anticorruption threats to accomplish policy goals.
High-powered rewards may motivate bureaucratic agents to demonstrate commitment to political principals’
agendas by producing administrative outputs conducive to desired policy outcomes. But there are many steps
Received: 14 January 2018 Revised: 27 July 2018 Accepted: 30 September 2018
DOI: 10.1111/padm.12562
Public Administration. 2019;97:177–194. wileyonlinelibrary.com/journal/padm © 2018 John Wiley & Sons Ltd 177
between possible rewards and intended outcomes. Under a performance regime, administrative outputs are subject
to the manipulation of public officials who are under pressure to produce both the desired activities and outcomes
(Bohte and Meier 2000; Bevan and Hood 2006). In the presence of uncertainty about the effectiveness of outputs
for producing rewarded outcomes, it is possible that public officials are reluctant to undertake activities that may not
produce actual policy outcomes. Alternatively, they may still seek to produce outputs, especially if these outputs are
likely not only to bring about desired outcomes but also to produce positive side benefits to themselves. Moreover,
rarely noted in the extant literature, there may be an unintended, secondary consequence of high-powered
incentives.
In the absence of the rule of law and in the presence of the need to generate timely and effective results, two
actions seem possible. One is the generation of outputs (e.g., public works and infrastructure) for producing public
goods (e.g., clean air and water). The other can entice corruption, especially in centralized economies (Kenny 2007,
2009). As Bozeman et al. (2018, p. 10) noted, in terms of public procurement procedures, ‘the existence of corruption
may lead contracts to be awarded to the producer that is able to pay the largest bribe, rather than the more efficient
producer’; and public officials may favour the project investment that ‘offer[s] the best opportunities for rent-seeking
and bribes’, instead of those that render ‘the highest value from the public perspective’.
This study makes two main contributions. First, it explores how the inception of a high-powered incentive struc-
ture and anticorruption efforts jointly affect the delivery of administrative outputs (i.e., activities controlled or
directed by government) and the achievement of policy outcomes (i.e., the intended goals of the activities). Previous
evidence regarding whether performance incentives improve public organizational effectiveness and policy outcomes
remains mixed and limited to a handful of policy areas (e.g., education, job training, crime/policing, public health, child
support), primarily in developed democratic countries (Gerrish 2016; Coglianese 2017). This study examines environ-
mental policy management, where the construction of pollution abatement plants is not only intended to ameliorate
environmental degradation. Improving environmental quality, especially from very poor levels, may also boost the
local economy by reducing costly disease from pollutants in people, plants and animals, and the cost and probability
of ill health in children and adults, and public unrest over poor environmental quality (Hook 2013; Albert and Xu
2016; Alkon and Wang 2018).
In this case, reliance on high-powered, results-oriented management may lead to the synergy of two priority
goals of political principals: economic growth and pollution mitigation. In this circumstance, corruption may be toler-
ated and the government’s anticorruption agenda may be strategically relaxed (Birney 2014; Rothstein 2015). Conse-
quently, the decision about how to build pollution treatment facilities (e.g., more or fewer, sooner or later, superior or
inferior quality) hinges on the comparison of benefits that public officials might receive from the high-stakes account-
ability system compared to costs that might ensue should corruption be punished. The second contribution of this
study is its use of two different measures of policy outcomes. As opposed tothe measure recorded independently by
a third party, the officially recorded measure, which is subject to government manipulation, is more likely to associate
with better results of policy interventions.
We examine China’s performance-based air pollution control policy aimed at reducing the emissions of sulfur
dioxide (SO
2
). Using this specific setting is both theoretically and practically significant. Increasingly, China’s central
government has recognized a wide array of adverse effects of air, water, and other forms of pollution on the nation’s
public health, economic productivity, social stability and, ultimately, regime survival (World Bank 2007; Alkon and
Wang 2018). Analysing panel data for 30 province-level jurisdictions from 2005 through 2010, we find that perfor-
mance rewards improve the quality of pollution abatement facilities, which is the output more closely attached to
the incentive structure. Anticorruption activities have small significant, positive effects on facility quality only prior to
the inception of high-powered rewards. However, neither public sector reform has any effect on expenditures for
facility operation or on the satellite-observed measure of pollution emissions. By contrast, the introduction of perfor-
mance incentives reduces manipulable, officially reported emissions, whereas corruption case investigations have no
significant effect. Coal consumption is consistently an important predictor of SO
2
emissions.
178 LIANG AND LANGBEIN
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