The Effects of Government Corruption on the Fellow Citizens

Based on the 1997-2009 China And spatial Autoregressive panel data models, empirical vertical fiscal decentralization effect and transverse trophy competition on local corruption. Results showed that vertical degree of fiscal decentralization may deteriorate local corruption and horizontal trophy competition of corruption among local governments have some effect, but its calming effect is smaller than the deteriorating effect of the vertical decentralization. Accordingly, the direction of China's fiscal decentralization system should be: by perfecting the supervising mechanisms constrain resource allocation powers of the local government from top to bottom, compressed space for rent-seeking corruption of local officials and guide the horizontal trophy competition of local officials, strengthening the inhibitory effects of the promotion of official corruption, improve the inherent power of self-discipline of local officials.