Crony capitalism, the party-state, and the political boundaries of corruption
构建模型分析中国党国体制下裙带资本主义与腐败的关系，发现低效制度滋生地方腐败虽提升短期生产率，但威胁中央控制，中央为应对危机风险会牺牲经济以加强危机管控。
We build a model that puts together crony capitalism, the hierarchy of the Chinese communist party-state, and the decision-making process inside the Party Center. We show that inefficient economic institutions create local corruption that raises realized productivity, while generating rents that flow along the party-state hierarchy up to the provincial level, threatening the Center's control in potential crises. Although both stronger crisis control and higher economic performance help the Center's goal to stay in power, we show that given a general fat-tailed risk of crisis, the Center will maximize crisis control at the expense of the economy when choosing its tolerance of local corruption. Power structure and corruption within the Center and reciprocal accountability between central and provincial leaders are also analyzed. Our analysis suggests conditions under which China's communist regime will or will not deal with the existential threat presented by corruption.