21 April 2019
Xi Jinping is unlikely to succeed in his anti-graft fight unless he revises the pay of government officials and reduces the temptation for bribery.
Xi Jinping is unlikely to succeed in his anti-graft fight unless he revises the pay of government officials and reduces the temptation for bribery.

Xi must focus on civil servants’ pay if he wants cleaner govt

A joint exposé last month by the Daily Telegraph and Channel 4 has highlighted the “MPs for Hire” scandal in Britain.

Undercover reporters posing as representatives of a fictitious Hong Kong-based PR firm PMR got into contact with two old-line British politicians — Jack Straw, a former foreign minister (2001-2006) during the Labor Party’s rule; and Malcolm Rifkind, also a former foreign minister (1995-1997) during the Conservative Party’s rule – to seek their services with promised payments.

Captured on hidden cameras, Straw and Rifkin agreed to help facilitate the senior management of the non-existent Hong Kong firm to meet with British political and business leaders in exchange for payments worth thousands of pounds.

Straw even revealed that he once accepted £60,000 to operate “under the radar” to use his influence to change EU rules while Rifkind said he was “self-employed” and that he can help foreign firms gain “useful access” to every British ambassador in the world.

The “cash for access” exposé came as a bombshell for many as Straw and Rifkind used to command wide respect and were considered to be people of high moral integrity.

The British parliament will now convene a hearing to look into the case. Reports say the lobbying sting may cost Straw, who would otherwise soon take his seat in the House of Lords, a Knighthood of the Garter. It is a classic scenario of going out for wool and coming home shorn.

Now both Straw and Rifkind are deemed to some extent to be culpable as it is an offense for parliament members to accept payments for services unrelated to their constituents. In Britain, there have long been rules requiring MPs to report their employment and income outside their official jobs.

Can a lawmaker have a part-time job? This is a topic of much debate in Britain.

Ed Miliband, Leader of the Labour Party as well as the Opposition, has made restricting non-official employment and income of politicians one of key policy agendas in his election platform. The results of a May election can be a gauge of British voters’ opinion in this regard.

Yet after the exposé Rifkind tried to defend himself, stressing that his salary of £67,000 as a parliament member “is not enough” for the standard of living he is entitled to and thus a second job to “bridge” politicians and the business sector is somewhat justified (Hong Kong lawmakers earn a higher annual salary – around HK$1 million (£87,430) excluding other forms of allowance).

Rifkind may be feeling that his salary — although nicer than what most of his nation’s compatriots earn a year — is inadequate. The elites who are high up in the political hierarchy need to patronize expensive restaurants and clubs to meet top honchos from the media, business and legal sectors.

As many of the top brass whom they meet are often much richer, the politicians may feel that they are lagging in the top circle despite being resourceful and well-connected in politics.

In this sense, it’s understandable that politicians like Straw and Rifkind may seek some extra income from people who need to tap their political connections, in a rent seeking way that is slightly nobler than corruption.

Now, given the still unfolding scandal in Britain, I can’t help bringing up the issue of China’s renewed graft-busting drive that aims to nail down all the “big tigers”.

A deterrent element for senior cadres is a main feature in authorities’ move to extract confessions from corrupt officials under prosecution, including Su Rong (蘇榮), former deputy chairman of the Chinese People’s Political Consultative Conference, since president Xi Jinping took office in 2012.

I have no doubt about Xi’s determination to crack down on corruption. In a March speech, Xi noted that just like preserving good natural environment of green mountains and limpid waters, the party must also make sure the country’s political environment is also pure and clean.

But given that the nation lacks stringent laws and regulations, as well as effective and well-developed market-oriented economy, there’s slim chance that China’s political environment can be purged of corruption.

US Nobel laureate James Buchanan and economist Gordon Tullock argue that expecting politicians and officials to be honest, fair and selfless is just unrealistic as they, just like anyone else, are economic animals of rational self-interest who pursue their own gains and advantages.

In whatever trade or business (including public services), their personal interests always come above anything else. This is just people’s nature, and Communist Party members are no exception.

As I have noted, the best and most feasible way to combat corruption is to focus on the common nature of egocentrism among all human beings.

In a mature and free economy, those who only pursue personal fortune and wealth can go to the business sector while those with ambitions in politics know they may be unable to earn much money as public servants. 

The prerequisite for a pure and clean political environment is that government remuneration packages and retirement insurance must be comparable to the private sector. Only when the demand of rational self-interest is met, can you expect officials to be honest and upright.

Since ancient times, traditional Chinese political ethics require those in high places to lead a simple, even poor but honest life. But the truth is that the emperor may still need to pay his ministers “money for honesty”.

Now, take a look at the civil service pay scales mandated by the Chinese State Council. Provincial-level officials are paid at 2,510 yuan per month. The salary simply cannot stand comparison to that of the private sector. So, who can resist the temptation of bribery or a second job for some extra income?

If even in a country like Britain, which is known for its well-developed legal and political systems and a vigilant media, there are politicians like Straw and Rifkind, is it realistic to expect miracles in a place like China?

Will a government official or party official be content with a salary that may be lower than that of a middle-rank clerk in a private firm?

This article appeared in the Hong Kong Economic Journal on March 12.

Translation by Frank Chen

[Chinese version 中文版]

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A famous Hong Kong writer; founder of the Hong Kong Economic Journal

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