Dimitar Gueorguiev and Jonathan Stromseth argue that Beijing's plan to expand and consolidate the country's anti-corruption system highlights an underlying tension between two broad approaches to reducing and deterring corruption in China, and to governance reform generally. This piece originally appeared in Nikkei Asian Review .

China’s National People’s Congress is expected to ratify legislation during the next two weeks to create a new supra-agency, the National Supervision Commission, to institutionalize President Xi Jinping’s signature anti-corruption campaign as a permanent feature of the state.

On Monday, Wang Chen, the newly elected secretary-general of the current legislative session, briefed lawmakers about planned revisions to the Chinese constitution. While most observers have focused on the removal of presidential term limits, another amendment will lay the groundwork for the new anti-corruption body, which will function independently of the judiciary and other state agencies.

As the first major governance initiative since the Communist Party Congress last October, the NSC could have long-term repercussions for Chinese citizens, particularly those working in the vast public sector. It could also undercut existing anti-corruption initiatives that emphasize transparency and open government information.

Further, it will affect economic and business activity in the country. By expanding the scope of the anti-graft fight beyond the Communist Party, hesitancy to make decisions that could be grounds for investigation may spread through the rest of the government, state-owned companies and other organizations.

The developments in Beijing highlight an underlying tension between two broad approaches to reducing and deterring corruption and to governance reform generally.

The ongoing anti-corruption campaign launched in 2012 and overseen by the Communist Party’s Central Commission for Disciplinary Inspection reflects a political approach. The campaign has focused exclusively on party members, punishing them for violations such as hosting lavish banquets, misusing public funds for travel or constructing luxurious government buildings.

More than 1.5 million officials, including 35 members of the party Central Committee and nine members of the CCDI itself, have been disciplined. The logic of this political approach has been that officials will not dare to engage in corrupt behavior if they believe the costs and punishments for doing so are severe enough.

Longstanding government-led efforts to reduce corruption by enhancing official transparency and increasing public access to government information reflect a legal approach. The principal logic is that government transparency deters corruption by increasing the chance that officials will get caught through public monitoring. By publishing official budgets, for instance, the government allows citizens to possibly determine whether public money is being misused and by whom.

Our research with colleagues in the U.S. and China shows that empowering Chinese citizens to monitor the bureaucracy has been more effective at reducing corruption than aggressive, top-down efforts that target individual corrupt officials. We recently compared provincial-level data on misused funds uncovered by the National Auditing Office, calculated as a share of government expenditures, against measures of the amount of information made available on budgeting, decision-making and the like. Increased transparency was strongly associated with reductions in the misuse of public funds.

The new state anti-corruption agency would fuse the political and legal approaches, but with a notable emphasis on the former. As official news agency Xinhua wrote, it will be “a political organ, rather than an administrative or judicial organ. When carrying out its duties of supervision, investigation, and disposition, it should always give top priority to politics.”

The NSC will share offices and personnel with the CCDI and consolidate existing corruption-fighting powers of key government departments into one party-led agency. It will oversee corresponding supervisory commissions set up at lower rungs of government all the way down to the county level. According to the draft NSC supervision law, the commission’s powers will supersede those of the Supreme People’s Court and Supreme People’s Procuratorate.

It will also have broader investigative reach than the CCDI, covering not just party members but all employees on the public payroll, including those working at universities and state-owned companies.

Not surprisingly, the regime’s plan to expand and consolidate the country’s anti-corruption system has sparked fierce debate among Chinese legal experts. Initially, some hoped that the NSC would put the anti-corruption campaign on a firmer legal foundation while maintaining the fight against graft as a key governance priority.

But critics now fear that establishment of the NSC will simply extend the Communist Party’s extrajudicial approach to anyone in the public sector. Concerns were voiced during a public review of the draft supervision law that citizens accused of corruption will have little or no legal recourse to challenge or appeal official decisions. Despite the party’s claim that a strong supervision commission will only strengthen the rule of law, a legally unconstrained disciplinary body will be vulnerable to political currents and manipulation.

It could also dampen public participation in the fight against corruption. Ironically, one of the reasons why China’s disciplinarians have pursued so many cases so far is because whistleblowers and average citizens have triggered investigations through tip-offs. In some cases, they have made use of public information statutes. High levels of public engagement however are unlikely to continue if an expanded political approach spreads anxiety throughout society.

The current anti-corruption campaign has also caused negative economic effects as local officials have often opted to sit on their hands, lest any particular decision be investigated. The extension of the campaign to the larger public sector is likely to generate even greater worries among local government officials, management of state-owned enterprises, and those they work with, including foreign investors.

A more fruitful way forward would be to ground the political fervor against corruption firmly within the country’s evolving legal framework so that it can complement, rather than displace, the progress made in strengthening bottom-up accountability. Following through on budget transparency requirements or passing a long-stalled asset disclosure law, for example, would do more to stem corruption than threatening the entire public sector with heavy-handed disciplinary measures.

Such an approach might lessen the bite of the new agency in the short term, but the governance payoff would be more far-reaching and enduring over the long run.

Dimitar Gueorguiev and Jonathan Stromseth are co-authors, with Edmund Malesky, of “China’s Governance Puzzle: Enabling Transparency and Participation in a Single-Party State” (Cambridge University Press, 2017).