Discipline without Slack: Anti-Corruption in China's Health Sector

Speaker: Victoria Liu, PhD student, Stanford University

Anti-corruption reforms are expected to improve public services by reducing waste and private extraction, yet services do not always improve even when corruption is genuinely constrained. This chapter argues that the service outcome depends on how corruption was organized before reform. When corrupt exchange becomes repeated and embedded in organizational roles, it can generate discretionary resources and trusted relationships that help public organizations operate despite weaknesses in their formal support systems. Such corruption remains costly and distorting, but removing it may also disrupt the informal capacity that had sustained routine work. I examine this argument in China's health sector, where the National Volume-Based Procurement program and the 2023 anti-corruption campaign constrained drug-related corruption. Province-level expenditure data from 2010 to 2023 show that outpatient care did not become more affordable and that expenditure rose more where hospitals had relied more heavily on the drug-centered system weakened by reform. Firm records and field interviews provide complementary evidence that the reforms disrupted both financial and relational supports. The findings show that suppressing corruption and building the formal capacity needed to replace it are separate political tasks.

About the Student Seminar Series

Our Student Seminar Series offers emerging China scholars an opportunity to engage directly with interdisciplinary faculty and peers from across campus to discuss and receive feedback on their research. Each seminar features one or several PhD students presenting their latest empirical findings on issues related to China’s economy. Past topics have included college major selection as an obstacle to socioeconomic mobility, the effect of a cooling-off period on marriage outcomes, and factors contributing to government corruption. Faculty and senior scholars provide comments and feedback for improvement. This event series helps to build and strengthen Stanford’s community of young researchers working on China.

Student Seminars are held on select Fridays from 12 - 1 pm. Lunch will be provided! 

Visit the Student Seminar Series webpage for more information on the content and format of the series and to learn how to sign up to present.