China may Explore Implementing a Modern “Anticorruption Allowance” System

It may be a good time to reflect on several significant initiatives before the start of China’s 20th National Congress. China, in my opinion, should implement an “anticorruption allowance” system, which has been a long-debated but unsolved subject.

Such a system was already developed by the Qing Dynasty Emperor Yongzheng in 18th century China. Called “yang lian yin” in Chinese, it was originally a unique official salary measure that ended up in a mess, making the Qing Dynasty the most corrupt period in China. The purpose of this payment system, which dates back to 1723, was to foster and reward officials’ honesty while avoiding corruption and inappropriate demands by paying them a high income that was equal to 10 to 100 times the base salary. The source came from local surcharge taxes and tax revenues, hence the amount of the allowance would depend on the financial condition of each locality. Following the establishment of the “anticorruption allowance” system, China experienced severe inflation, and the approach’s institutional restrictions were also altered. These elements changed the structure of the framework by turning local wealth into a “revenue stream” for authorities.

The “anticorruption allowance” system as it was practiced in the Qing Dynasty failed to prevent corruption from happening, but it was not without its merits. Singapore’s management of officials is actually more or less derived from a similar approach. In regions with better economic and social development, especially where it relies on elites for social management, it would be impossible not to implement a similar system. Some idealistic leaders with little financial means might try to mobilize the entire populace to create a new social order, but the result would almost certainly be a fictionalized narrative. After all, idealists are always in the minority.

As a result, establishing a competent modern-day “anticorruption allowance” mechanism would require the construction of such a system, as well as an increase in the number of idealists, thereby forming a group of secularized elites who are honorable and capable of leadership.

Observing both the success and failure experiences of the “anticorruption allowance” system, I think that the problem lies in the design of the implementation, as it cannot be imposed based on local standards. Instead, it should be managed by the central government in accordance with central standards. Therefore, the modern “anticorruption allowance” system must be detached from the locality and must be separated from local standards and local fiscal revenue, otherwise the rich will become richer, the poor will become poorer, and no official would want to serve in poorer regions.

How should the mechanism of this system be established? This is, of course, an important technical issue, but it is not an unsolvable one. For this purpose, the central finance department will need to establish a special fund, where the monetary source can be from both confiscated resources of those convicted of corruption, as well as from tax revenues like those of resource taxes and financial taxes. Of course, it can also be partly from social donations. Overall, the monetary source of the fund does not pose a problem, the actual challenge lies in decision-making and implementation.

In my opinion, such a system should be adopted primarily for economic authorities, rather than government officials, to inspire the official team to perform their duties more effectively. Government officials, on the other hand, are the elites among the elites, and they should be idealistic. In this way, economic officials can execute their responsibilities in the economic field, and for those whose performances are outstanding, they will receive a certain small amount as a conditional reward. This does not require much contribution from the overall national economy, but such an approach can be conducive to solving the problem of corruption.

It’s worth noting that this contemporary “anti-corruption allowance” mechanism is essentially a requirement in the social security system.

The strength of any country is guaranteed by two departments, i.e., financial and defense. The construction of the former is even more important than the latter, as it generates wealth, and it is impossible to win a war without sufficient monetary resources.

As a result, not only should national military security and spending be ensured, but so should the finance department, which is the bedrock of the national economy and people’s livelihood. As a result, the approach proposed here is in fact indispensable. This is a historical realism stance based on historical facts.

Perhaps it can be said that anticorruption is a kind of social progress, and the construction of the “anticorruption allowance” system is part of it.

Final analysis conclusion:

China may explore implementing a contemporary “anticorruption allowance” system to incentivize officials to better build the economy and serve society.

Chan Kung

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