Can the Hong Kong ICAC Help Reduce Corruption on the Mainland?

Abstract

Hong Kong's Independent Commission Against Corruption (ICAC) serves as the example par excellence of a successful anti-corruption agency. Yet, the Agency works in one of the more corrupt jurisdictions worldwide (the People's Republic of China). To what extent can the ICAC – and the Prevention of Bribery Ordinance (POBO) which regulates its work – contribute to reductions in corruption on the Mainland? In this paper, we look at the ways in which the ICAC – technically a Chinese agency (albeit operating in a legally independent jurisdiction) – can help to reduce and prevent corruption on the Mainland. We find that with the proper modifications to the POBO, the Agency can reduce the value of corruption on the Mainland between $5-$20 billion. Through the right regulatory design, these amendments can help actually increase tax revenue by about $200 million per year. We also analyse the political-economy aspects of the reform – and present an example of an optimal reform path. Using economic analysis to assess the costs and benefits of reform – as well as the winners as well as losers of reform – this paper provides an illustration of evidence-based legislative analysis. Disclaimer: This Working Paper comes from work done as a Visiting Fellow to the Centre for Comparative and Public Law at the University of Hong Kong's Faculty of Law. The materials and opinions in this paper reflect the views of the author and do not attribute in any way to the University of Hong Kong, the European Union, or any organisation to which the authors are affiliated. This paper represents a liberal contribution to the marketplace of ideas and all materials in this paper are based exclusively on publicly available information.

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Cite this paper

@inproceedings{Michael2013CanTH, title={Can the Hong Kong ICAC Help Reduce Corruption on the Mainland?}, author={Bryane Michael}, year={2013} }