Corruption and the Secret of Law

A Legal Anthropological Perspective

Gerhard Anders, Monique Nuijten, Monique Nuitjen

• Publisher: Routledge
• Year: 2017
• eBook ISBN:
  9781351948340
• Topic: Sozialwissenschaften
• Subtopic: Rechtswissenschaft

This volume presents an anthropological perspective on the hidden continuities between corruption and law. The authors argue that the two opposites, corruption and law, are inextricably linked - with the possibility of the former already inscribed into the latter. Taking a critical stance towards the normative good governance agenda spearheaded by institutions such as Transparency International and the World Bank, this volume argues that by uncritically depicting corruption as an absolute evil, these anti-corruption programs disregard the close relationship that exists between corruption and state power. Addressing various aspects of a complex and ambivalent phenomenon, Corruption and the Secret of Law draws on studies from different parts of the world including Burundi, China, Indonesia, Italy, Japan, Mexico and the USA and provides a valuable resource for students, researchers and policy-makers working in this area.

State Officials in the Twilight Zone

Chapter 8
Corruption or Social Capital? Tact and the Performance of Guanxi in Market Socialist China

Alan Smart and Carolyn L. Hsu

In recent years, near universal disdain for corruption has been paralleled by acclaim for social capital as the new cure for socio-economic and developmental problems, yet the overlap between the two processes is rarely considered. Networks, trust, obligation, and a reliance on informal arrangements: all are part of both phenomena. It is only by assuming that corruption is clearly defined and distinct from social capital that respective condemnation and celebration can be maintained. The argument by Rothstein and Stolle that "the high level of social capital in the Scandinavian countries can be explained by ... the low level of patronage and corruption" (Rothstein and Stolle 2003: 1) takes for granted the clear separability of the two concepts. Concrete cases, however, reveal their fuzzy boundaries.

In China, the term guanxi ("relationship," "network" or "connection") encompasses a complex body of informal practices, based on principles of gift exchange, and used for both affective and instrumental purposes. On the one hand, research on guanxi has revealed its positive functions for building trust in the absence of adequate formal legal and financial institutions (Yang 1994). Guanxi practice has facilitated entrepreneurship in China in the absence of enforceable contracts by engendering sufficient trust for foreign investment (Smart and Smart 1991), informal loans (Tsai 2002), and business partnerships and deals (Hsu 2005; Keister 2002). On the other hand, China scholars have also, often in the same studies, drawn strong links between guanxi practice and corruption (fubai or tanwu) (Smart 1993b; Sun 2004; Tsai 2002; Wank 2002; Yang 1994). Indeed, in China, both official state discourse and dissident rhetoric tend to condemn guanxi practice as corruption (Hsu 2001; Liu 1983; Yang 1994: 56-62).

Guanxi has an ambiguous nature: it can either be presented as clearly morally better than corruption or as merging inseparably into it. Ordinary citizens are just as likely to describe guanxi practice in neutral or even positive terms, as in negative ones. They find it difficult to articulate the difference between "good" guanxi practice and "bad" corruption. Mayfair Yang (1994) describes her interviewees struggling to explain why "reasonable" (heli) guanxi practice is not corruption. For them, in broad terms corruption is "for selfish, individual-gain purposes, and it is not legal," whereas guanxi practice is only used for "reasonable demands" and connotes "'human sentiments' (renqing), friendship, long-term personal relationships, and the image of people helping one another" (Yang 1994: 62f.).

In this chapter, we argue that situated performance and the interpretations of others influence whether particular actions and relationships come to be perceived and labeled as corrupt or not. As the introduction to this volume persuasively argues, the definition of corruption cannot be restricted to legal definitions, but also has to take account of contested moral evaluations. Skill is particularly necessary to avoid practices from becoming labeled as corrupt. Inept performance can result in a gift exchange becoming disdained as a bribe.

Skilled performance in exchange was particularly important during the early period of China's economic reforms (1979-1992), when the incorporation of capitalist economic practices into a communist state was facilitated by a large degree of ambiguity and tacit acceptance of things that were (not yet) legal or adequately regulated by administrative guidelines. This situation is epitomized by the saying that "A model worker in Guangdong may be a criminal in Shanghai, a chair of meetings in Hainan may be a bearer of handcuffs in Beijing" (Sun 2004: 3). The experimental and geographical diversity of the reform process resulted in high levels of uncertainty about what was legal, as well as about what was moral, since newly legalized practices such as the dismissal of workers were often seen as immoral. The rectification and clarification process is still ongoing, but preparation for and accession to the World Trade Organization has greatly increased the degree of legal transparency in contemporary China.

This chapter will concentrate on guanxi practices that might be defined as corrupt, but which participants would prefer to have seen as legitimate, such as the exchange of gifts and favors. An ethnographic perspective encourages us to explore how the social relationships involved in guanxi practice and corruption are seen by local actors. Benefiting from one's position in government or business is not always inherently perceived as fubai or tanwu (corruption or bribery); becoming characterized as "dirty" involves complex processes of performance and interpretation. Tactful performance in social interaction is a crucial but under-examined element of these processes. We use examples from our field research to illustrate the tactful management of morally ambivalent demands, and then discuss more widely the significance of tact in social interaction.

We draw upon research conducted at what could be considered the People's Republic of China's (PRC) two opposite poles: Guangdong in China's far south, and Heilongjiang in its far north. Their geographic difference is mirrored in their divergent experiences in market reform. Guangdong has consistently been an early mover and innovator, frequently "pushing the envelope" far beyond what the central government had explicitly sanctioned or envisioned. Heilongjiang, with its heavy economic reliance on state-owned enterprises, experienced its golden age of economic prosperity under the socialist planned economy and therefore has been much more reluctant to embrace the market. In Guangdong, where Smart's research concentrated on foreign investment, pioneering capitalists, most of whom in the first years of reform were from Hong Kong, navigated ambivalent waters that relied on social legitimacy to overcome numerous breaches of Chinese law. Exchanges that were more or less "corrupt" were ubiquitous in the management of the new capitalist enterprises and the local governments that facilitated their expansion. In order to cope with the incompatibilities between Chinese communist rule and capitalist logic, social relationships lubricated the clashing gears of the two, making it possible to take advantage of potentially lucrative "factor complementarities."

In the city of Harbin in Heilongjiang, Hsu's research reveals, guanxi connections were an integral part of business practices because contracts could not be enforced through legal means. Harbin businesspeople reacted to the inadequacy of formal institutions by confining their business transactions to "friends" and avoiding "strangers." Through guanxi practice based on gift exchange, these businesspeople could expand their networks of "friends" promiscuously, allowing entrepreneurship to flourish. In Harbin, everyone seemed to engage in guanxi practice and seemed to consider it a normal daily activity, and yet under certain circumstances, guanxi practice was strenuously condemned as corruption.

This chapter tackles the complicated relationship between guanxi practice and corruption from a variety of angles. The first section examines the historical and ideological roots of current Chinese cultural conceptions of the two phenomena. We analyze the historicized narratives that lay behind the contested, but relatively dichotomized view of "reasonable" guanxi practice versus condemnable corruption. The second section describes China's political and economic trajectory in the post-1979 market reform period, and its influence on guanxi practice and corruption. The third section examines the particular ways in which social actors strive to enact "reasonable" guanxi, rather than "corrupt" activities. It looks at how, under these circumstances, actors negotiate the complex but necessary activities of gift exchange, building trust, utilizing networks, and constructing favorable relationships. We explore the role of tact as a crucial dimension in performing acceptable guanxi practice and avoiding labels of corruption. In the last section, we return to the macro level and discuss different predictions for the future that scholars have made about the relationship between guanxi and corruption.

Guanxi and Corruption in Historical Context

Contemporary China scholars, especially those in the West, tend to see guanxi and corruption as intertwined phenomena. Our informants were also quick to condemn certain forms of guanxi practice as corruption. However, in the lived experience of Chinese citizens, "reasonable" guanxi practice and corruption were attached to two different sets of associations and evoked two different sets of "historical" narratives. The term guanxi connotes "human sentiments" (renqing), warm generosity, and close relationships, while "corruption" (fubai or tanwu) elicits stories of immoral officials exploiting and abusing those whom they are supposed to serve.

Local understandings of both guanxi practice and corruption are rooted in what Westerners call "Confucianism," and what Chinese informants would probably term "traditional Chinese culture." This worldview purports to explain the nature of human beings and human society by focusing on the centrality of relationships. The five Cardinal Relationships are seen as the central organizing principles of society: affection between parent and child, righteousness between ruler and subject, distinction between husband and wife, order between older and younger brothers, and sincerity between friends (Lo and Otis 2003: 136). In Confucian ideology persons were primarily defined by their social roles and responsibilities in relationships. If everyone acted out his or her social role correctly, society would prosper. These relationships were generally hierarchical and complementary, and based on the two central institutions of dynastic China: the patriarchal family and the imperial court. Family relationships were the subject of guanxi discourse, while corruption rhetoric focused on the relationship between the court and its subjects.

To understand how guanxi is practiced, we must understand the role of material gifts and favors in Confucian relationships. In contrast to the Western ideology of relationships, in which instrumental considerations taint "pure" emotional ties (Carrier 1999), in Chinese Confucianism expressive relationships were supposed to be manifested through the exchange of useful goods and helpful actions (Lo and Otis 2003). To put it another way, in Western Judeo-Christian tradition, the ideal friend is one who lays down his life for his friends, the antithesis of the false friend who "uses" friends for personal gain. In contrast, in Confucian ideology, "using" friends for personal gain is lauded as the path to true friendships. In this view, genuine relationships are built through transactions that benefit one individual more than the other, since this type of interaction puts the first person in debt to the second and sets up the rationale for further interactions.

At heart, guanxi practice is based on the logic of gift exchange (Mauss 1967). In a gift exchange, the "relationship must be presented as primary and the exchange, useful as they may be, treated as only secondary" (Smart 1993a: 399). Therefore, each transaction must be treated as a step in a series of interactions designed to deepen the relationship. The rule of thumb in guanxi practice was to respond to any gift with greater munificence: "You honor me with a foot; I honor you with a yard" (Hwang 1987: 954; Yang 1994: 143). We can contrast gift exchanges to market transactions, which are isolated and discrete interactions where both parties exchange items of equivalent value. In guanxi practice, a gift that clearly and blatantly paid off the debt and thereby ended the relationship of obligation between the two parties would be considered shockingly offensive.

In pre-communist guanxi practice, people outside the extended kin network were strangers (shengren), unconstrained by obligations or affection and therefore not eligible for gift exchange or guanxi ties. In interactions between strangers, there was no basis of trust, and both parties were assumed to be motivated solely by self-interest. However, certain non-kin had the potential to become pseudo-kin through guanxi gift exchange. These were people who shared a "guanxi base" such as the same surname, the same hometown, the same workplace, or the same class in school (Tong and Yong 1998). A guanxi base can be seen as a latent connection that could be activated into a guanxi relationship through the commencement of gift exchange.

Although guanxi practice is understood through the discourse of warm relationships and emotional connections, it has also always been a technique for instrumental gain. In gift exchange, when people do favors or offer gifts to their "friends," kin, or pseudo-kin, they cannot act as though they expect something in return. However, the norms of reciprocity do obligate the recipient to do something in return (Hwang 1987; Lo and Otis 2003; Smart 1993a). This contradiction between the "unconditional" gift and the binding obligation that results was the central principle that allowed the practice of guanxi to function. Indeed, the Chinese term guanxi can be translated not only as "relationship" but also as "obligation." (When thanked, Chinese people respond, "Meiyou guanxi," or "No obligation!"—an act of misrecognition or of tactful denial.)

In the Communist era under Mao Zedong (1949-1978), the pressures of a redistributive economy and an intrusive state forced guanxi practice to change. Confucianism was condemned, and the power of the patriarchal clan was significantly undermined. No longer centered on the family, guanxi practice became a "modularized" practice for individuals (Lo and Otis 2003). Guanxi practice became untied from guanxi bases, and people could build guanxi ties with anyone, just by starting a series of favor exchanges. The most common way to meet new guanxi contacts was through introductions through mutual "friends." Consequently, one of the best favors a person could offer a friend (or potential friend) was an introduction to someone who might potentially help them out someday. Moreover, since people could still obtain favors from "a friend of a friend of a friend," they could reach out to a substantial population of useful contacts. Despite the fact that guanxi practice networks could and did expand greatly in their new, modularized form, these "friendships" were still materially manifested through gifts and favors. And despite official propaganda campaigns condemning guanxi practice (Gardner 1969), these behaviors continued to be associated in popular talk with the language of cordial emotional ties. To be a human being with "human sentiments" (renqing) was to practice guanxi, and a person who defaults on guanxi obligations was a person with no face (mianzi). Failing to meet expectations that one would reciprocate past kindness or favors could result in accusations of lacking "conscience" (liangxin) (Oxfeld 2006). As a result, Chinese could talk about guanxi without shame, unlike corruption.

It is useful to think of guanxi as occupying the middle of the space of social relationships, ranging from purely instrumental...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Contributors
• Acknowledgments
• SYSTEMATIC CORRUPTION AND BUREAUCRATIC ITINERARIES
• THE INDETERMINACY OF THE LAW AND THE LEGAL PROFESSION
• CORRUPTION ACCUSATIONS AND POLITICAL IMAGINARIES
• STATE OFFICIALS IN THE TWILIGHT ZONE
• Index