In China's Gilded Age, Yuen Yuen Ang sets out to solve the same puzzle I tackled in my 2012 book Double Paradox: if China is as corrupt as is commonly assumed, how can it have grown so rapidly? In key respects, the paradox is even more puzzling today than it was decade ago. The abrupt fall of Politburo member and Chongqing Party Secretary Bo Xilai in early 2012 segued into a massive anti-corruption crackdown that brought down an unprecedented number of senior officials (known as “tigers”). In the process, Xi's crackdown revealed that corruption was very likely more severe than it appeared when I was writing.

Ang's proposed solution to the Chinese corruption-growth puzzle centres on a critique of conventional measures of corruption. Breaking corruption down into four separate components (petty theft, grand theft, speed money and access money), Ang argues that in China high-level corruption involving the payment of “access” bribes is more common than in countries with similar Transparency International Corruption Perceptions Index scores. More critically, Ang continues, anarchic street-level corruption (petty theft) is relatively rare and the norm at the grassroots levels is instead a form of “organized corruption” wherein units, not individuals, scrape off a share of local businesses profits. Because public units’ “take” is a percentage of the gross profits of local businesses, Ang argues, they have incentives to “nurture” these “golden geese.” Fat geese, after all, lay bigger golden eggs than golden geese who have been plucked bare and starved. Low-level corruption in China, Ang concludes, is thus actually pro-growth rather than predatory as it is elsewhere.

Corruption at the top, Ang argues, is also pro-growth. Because officials’ careers depend on demonstrated competence and the most unambiguous evidence of competence is high rates of economic growth, senior officials’ personal interests are symmetric with those of major companies and mirror those of their rank-and-file subordinates. By stimulating and encouraging the growth of businesses in their areas of responsibility, senior officials maximize their chances of promotion while also generating opportunities to scrape off some of the “sludge” – that is, to collect a share of the business profits their official actions help generate. Ang thus ends up arguing along the same lines as George Washington Plunkitt, as recorded by Riordon a century ago in Plunkitt of Tammany Hall. Plunkitt, a New York politician and stalwart of the Tammany Hall political machine, argued that corruption was “honest” so long as a politician only took a cut of the goods and services he delivered to the public and that it actually motivated talented men to serve the people. Why, he asked, should a man work hard for the public if his hard work was not financially rewarding? In Ang's formulation, the sludge from access money acts like a “steroid” to simulate officials to maximize growth and hence has the opposite effect of petty theft and grand theft, both of which are “toxic” for growth. Although steroids often have long-term negative effects, Ang continues, in contemporary China they are likely to work in the same manner that Plunkitt claimed honest graft had worked during the American Gilded Age. That is, corruption will fuel rapid growth, thus stimulating the emergence of a new “progressive” middle class that will eventually ally with the business community to push for greater accountability and transparency, thus lowering corruption in the long term.

Ang's proposed solution to the Chinese corruption-growth puzzle is provocative and deserves serious scholar attention. It suffers, however, from a number of drawbacks. First, her use of a textual analysis of People's Daily and Xinhua to demonstrate a significant drop in petty and grand theft yields suspect results. Both sources largely focus on high-level corruption. By and large, grassroots corruption goes unreported, even in the Chinese press. Ang's textual analysist thus likely measures shifts in the high-level discourse on corruption, not necessarily changes in the nature or severity grassroots corruption.

Nor is there convincing evidence that anarchic petty theft – or what has been described as “looting” – has been supplanted by what Ang describes as organized and regulated “profit sharing” in the form of fee-taking that is used to fund off-the-books “bonuses” in lieu of uncoordinated bribes and shakedowns. On the contrary, the heyday of “organizational corruption” during the 1990s (ie, the san luan) was characterized by the very sort of uncoordinated, “grabbing hands” predation that Ang points to the fatal enemy of golden geese. Ang certainly supports her claims with impressive interview data. It is not clear, however, that those interviewed did not gloss over the predatory nature of their illegal extractions and paint a more benign picture. Data drawn from court judgements, moreover, suggest that anarchic plunder and individualized bribery are still the norm, not benign profit sharing.

Finally, Ang's claim that Chinese corruption is qualitatively different because of the greater prevalence of access money corruption does not seem to resolve the core paradox. This qualitative difference should, ceteris paribus, reduce the negative impact of corruption on growth. Ang's data, however, appear to show that the qualitative differences between China's access money corruption and corruption in other counties at similar level of development were relatively slight. China thus still seems to represent an outlier to the negative corruption–growth correlation because of its enormously high growth rate. It is thus not clear that Ang has conclusively solved the China corruption–growth puzzle by showing that corruption is either benign – and hence not a barrier to high-speed growth – or that high levels of access money corruption have acted as a growth steroid. Nor is it clear that access money corruption has artificially boasted growth rates in ways that will push China through its current gilded age and into a new progressive era with Chinese characteristics. Ang has, nevertheless, made an important scholarly contribution to our understanding of the puzzles and paradoxes of the political economy of contemporary China.