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The Effects of Anti-corruption Campaign on Research Grant Reimbursement: Regression Discontinuity Evidence from China

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Abstract

Integrity and research ethics are cherished institutions in academic world. Although most societies have rules and codes that govern ethical conducts in research, few studies have provided quantitative evidence on the impacts of these regulations and codes on the behaviors of researchers. In the context of a nationwide anti-corruption campaign in China, this paper evaluates the changes of principal investigators’ reimbursement behavior in a leading university when new reimbursement policies were introduced. Utilizing a novel grant dataset and a regression discontinuity design, we find that the new policies lowered PIs’ monthly average amount of reimbursement from research grants by 35%, which can be interpreted as a reduction in grant misuse. Following speculations we argue that institutionalizing orchestrated efforts on grant management, payroll systems, and research integrity education is in the right direction toward building China into a true scientific power.

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Notes

  1. Shamoo and Resnik (2015) point out that the rate of misconduct has been estimated to be as low as 0.01% of researchers per year (based on confirmed cases of misconduct in federally funded research) to as high as 1% of researchers per year (based on self-reports of misconduct on anonymous surveys).

  2. “Tigers” refer to high-ranking corrupt officials, and “flies” refer to corrupt low-ranking cadres at the local and grassroots levels.

  3. Such misuse can be demonstrated in a variety of forms, including, but not limited to, transferring grant funds to firms, often owned by academics, via fraudulent contracts and invoices, paying private firms’ debts with money from research grants, embezzlement and spending on activities irrelevant to research, and using students’ and other persons’ identities to request labor compensation. All of these fit into the standardized definition of corruption, or “the abuse of entrusted power for private gain,” as defined in many corruption studies (Mungiu-Pippidi 2006; Persson et al. 2013) and leading anticorruption organizations such as Transparency International (available online at http://www.transparency.org/about_ti/mission.html, accessed on January 15, 2017). Misuse of public R&D funds is also acknowledged as a form of academic misconduct, along with fabrication, falsification, and plagiarism (Swazey et al. 1993).

  4. Such indices include Corruption Perception Index (CPI) of Transparency International (TI) and World Governance Indicators of World Bank based on expert assessments and opinion surveys.

  5. In sharp contrast, over the seven years from 2005 to 2012, the university issued 12 documents to address accounting issues with only six related to research grant spending.

  6. It should be pointed out that compensation for labor costs from Chinese research funds applies only to students and consulting experts not participating directly in the projects. In other words, the PI and other participating scholars, regardless how much effort they put into the research, cannot be paid or compensated from the grant. Theoretically, the policy, if strictly implemented, would dis-incentivize Chinese researchers from applying for research funding. But in fact, research fund applications are very competitive in China, as it is almost an open secret that Chinese universities, before the introduction of the new policy, allowed for some portion of funding to reimburse non-research-related spending as long as tax invoices were provided (Wen 2011).

  7. For confidential reasons, the employment ID was obfuscated before we obtained the access to all the data.

  8. For instance, prior to March 2013, the coefficient of the minimum APR is 0.000025 and those of the 25th, 50th, 75th percentiles are 0.0119, 0.0458, and 0.0525, respectively. After the implementation of new regulation, the coefficient of the minimum APR plummets to 1.67e-08, and the 25th, 50th, 75th percentiles also drop substantially, to 0.0042, 0.0209, and 0.0230, respectively.

  9. The horizontal grants in Chinese universities, i.e. funded by firms and other non-governmental organizations, used to have even much looser regulations on spending than the vertical grants from the central and regional governments. The new university documents stated explicitly for the first time that the horizontal grants also become state-owned assets once they are deposited into the university’s account, and the university shall apply the same regulations as those applied to the vertical grants.

  10. In align with the new reimbursement policy, the signature and stamp from the Dean is a must. It is possible that instead of himself the PI’s assistant or supervised student will get these approvals. But in a similar vein there are no incentives for the PI or his assistant to double their workload splitting their invoices for reimbursement if the research-related spending is genuine.

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Acknowledgements

This research was made possible by the generous support through the Ministry of Education of China (#17YJAZH075) and the National Natural Science Foundation of China (#71303147; #71774091). The views expressed herein are those of the authors and not necessarily those of the funder. We are responsible for any errors

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Authors and Affiliations

  1. School of International Relations and Public Affairs, Fudan University, Shanghai, China

    Li Tang

  2. Faculty of Business, University of Nottingham Ningbo China, Ningbo, China

    Cong Cao

  3. University of Texas, San Antonio, San Antonio, USA

    Donald Lien

  4. Renmin University of China, Beijing, China

    Xiaoou Liu

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  1. Li Tang
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  2. Cong Cao
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Correspondence to Xiaoou Liu.

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Appendices

Appendix 1: Budget Table of National Science Foundation of China in 2014

科目名称 (Items in Chinese)

Items (in English)

一、研究经费

I. Research Budget

1.科研业务费

1. Research service fee

(1) 测算/计算/分析费

(1) Test/calculation/analysis costs

(2) 能源动力费

(2) Energy cost

(3) 会议费/差旅费

(3) Conference/Travel cost

(4) 出版物/文献/信息传播费

(4) Publication related costs

(5) 其他

(5) Others

2、实验材料费

2. Lab material cost

(1) 原材料/试剂/药品购置费

(1) Materials and supplies

(2) 其他

(2) Others

3、仪器设备费

3. Equipment cost

(1) 购置

(1) Direct purchase

(2) 试制

(2) Experimental equipment cost

4、实验室改装费

4. Lab reconstruction cost

5、协作费

5. Coordination fee

二、国际合作与交流费

II. International Collaboration and exchange cost

1、项目组成员出国合作交流

1. Overseas exchange cost

2、境外专家来华合作交流

2. Expenditure to invite foreign experts to China

三、劳务费

III. Labor cost (students only)

四、管理费

IV. Administration fee

合计

Total

Appendix 2

To test the validity of the time threshold selection, we applied the method proposed by Chay et al. (2005). The test runs a series of regressions with the optimal selected bandwidth. Each regression included a different indicator of “the new reimbursement policy is effective in month or after,” where represents the exact month during the 12 months between January and December 2013. We graphed the distribution of bootstrapped t-stat for RDD estimates from the series RDD regressions in the following Fig. 5. The density plot demonstrates that when using March 2013 as the timing cutoff, as indicated by the red vertical line, the bootstrapped t-stats from March 2013 is located at the left-most tail of the distribution. This pattern further suggests that the likelihood of finding an effect as large as we did is very unlikely merely due to randomness (Depew and Eren 2016).

Fig. 5
figure 5

Tests for validity of timing threshold

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Tang, L., Cao, C., Lien, D. et al. The Effects of Anti-corruption Campaign on Research Grant Reimbursement: Regression Discontinuity Evidence from China. Sci Eng Ethics 26, 3415–3436 (2020). https://doi.org/10.1007/s11948-020-00265-7

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