Available online at www.sciencedirect.

com
Availableonline
Available onlineatatwww.sciencedirect.com
www.sciencedirect.com

ScienceDirect
Procedia
ProcediaComputer
ComputerScience
Science00199
(2018) 000–000
(2022) 1192–1197
Procedia Computer Science 00 (2018) 000–000 www.elsevier.com/locate/procedia
www.elsevier.com/locate/procedia

The 8th International Conference on Information Technology and Quantitative Management

The 8th International Conference on Information Technology and Quantitative Management
(ITQM 2020 & 2021)
(ITQM 2020 & 2021)
Study on the Relationship of Grassroots Corruption and
Study on the Relationship of Grassroots Corruption and
Government Expenditure Based On Panel Data
Government Expenditure Based On Panel Data
Su Nana
Su Nana
a
International Studies School, Sichuan University, Chengdu 610064,China
a
International Studies School, Sichuan University, Chengdu 610064,China
Abstract
Abstract
The study found that the level of grassroots corruption and the scale of government spending was positively correlated, that
Thethe
is, study found
higher thethat theoflevel
level of grassroots
grassroots corruption
corruption, and thethe
the greater scale
sizeofofgovernment
government spending wasWhat’s
spending. positivelymore,
correlated, that
grassroots
is, the higher
corruption willthe leveltheofgovernment's
affect grassroots corruption, the greater
public expenditure the sizesignificantly
structure, of government spending.
increased What’s more,
the expenditure grassroots
on science and
corruption will
technology, affect the government's
education，urban and ruralpublic expenditure
community structure, significantly
affairs，reducing increased
the expenditure the expenditure
on national on science
defense and and
health care.
technology, education，urban
Therefore, suggest intensifyingand anti-corruption
rural communityefforts
affairs，reducing the expenditure
and standardizing on national
government approvaldefense
flow. and health care.
Strengthen the
Therefore, suggestofintensifying
institutionalization corruption and anti-corruption
administrativeefforts and standardizing
accountability, to build a fullgovernment approval
range of social flow. system,
supervision Strengthen
so asthe
to
institutionalization
optimize the Structure of corruption and administrative
of public expenditure, improve accountability, to build aof
the use and allocation full rangeresources.
public of social supervision system, so as to
optimize the Structure of public expenditure, improve the use and allocation of public resources.
© 2021 The Authors. Published by Elsevier B.V.
© 2021 The Authors. Published by Elsevier B.V.
This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
© 2021 The
Selection Authors.
and/or Published
peer-review by Elsevier
under B.V. of the organizers of ITQM 2020&2021
Peer-review under responsibility of responsibility
the scientific committee of the The 8th International Conference on Information Technology
Selection and/or peer-review under responsibility
and Quantitative Management (ITQM 2020 & 2021) of the organizers of ITQM 2020&2021
Keywords：Grassroots Corruption; Government Expenditure; Panel Data;
Keywords：Grassroots Corruption; Government Expenditure; Panel Data;

1. Introduction
1. Introduction
There have been many studies on the relationship between grassroots corruption and government expenditure,
butThere
there have beenpractical
are few many studies on the relationship
explorations between
based on China grassroots
data, corruption
especially and government
the relationship betweenexpenditure,
grassroots
but there are
corruption andfew practicalexpenditure
government explorationsinbased on China
the western data,
region especially
needs the relationship
to be further between
studied. Based on the grassroots
panel data
corruption
of 21 citiesand
in Sgovernment
province ofexpenditure
2007-2014,inthis
thepaper
western region needs
empirically to be the
analyzes further studied.
influence of Based on the
corruption onpanel data
the scale
of
and21structure
cities inof
S government
province of 2007-2014,
expenditure.this paper empirically analyzes the influence of corruption on the scale
and structure of government expenditure.
2. Model and Data
2. Model and Data
The purpose of this study is to test the impact of grassroots corruption on the scale and structure of
The purpose
government of this study
expenditure. is to test
The sample is the impact
panel data of 21
grassroots corruption
cities and prefecturalon of
theSscale and structure
province from 2007 ofto 2014.
government expenditure. The sample is panel
This paper sets the econometric model as follows: data of 21 cities and prefectural of S province from 2007 to 2014.
This paper sets the econometric model as follows:
 E-mail address: 869955328@qq.com
 E-mail address: 869955328@qq.com

1877-0509 © 2021 The Authors. Published by Elsevier B.V.

This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
Peer-review under responsibility of the scientific committee of the The 8th International Conference on Information Technology and
Quantitative Management (ITQM 2020 & 2021)
10.1016/j.procs.2022.01.151
 Su Procedia
Su Nan/ Nan et al.Computer
/ Procedia Computer
Science Science
00 (2017) 199 (2022) 1192–1197
000–000 1193

Expend it =i +  corrit +  X it +  it

Among them, the subscript I and T respectively represent city, state and year, the explained variable
Expend is an indicator to measure government expenditure, and the explanatory variable Corr is an indicator to
measure grassroots corruption,X is other economic variables and control variables that affect government
expenditures, αi is an unobservable fixed effect of the city and state, and εit represents a random disturbance
item, and it is assumed to conform to the iid (0, δ2) distribution.Table 1 shows the variables involved in the
model and their definitions.
Table 1 Explanatory variables scale
Symbols for variable names Definition
Corruption of officials（corr） Number of official crime cases/number of public
officials
Total government public finance expenditure Total Public Finance Expenditure/Gross Regional
（t-exp） Product
General public service expenditure（pub） General public service expenditure/total public
finance expenditure
Defense expenditure（def） Defense expenditure/total public finance expenditure
Public safety expenditure（safe） Public safety expenditure/total public finance
expenditure
Education expenditure（edu） Education expenditure/total public finance
expenditure
Science and technology expenditure（sci） Science and technology expenditure/total public
finance expenditure
Cultural, sports and media expenditure Cultural, sports and media expenditure/total public
（cul） finance expenditure
Social security and employment expenditure Social security and employment expenditure/total
（soci） public finance expenditure
Medical and health expenditure（med） Medical and health expenditure/total public finance
expenditure
Energy saving and environmental protection Energy conservation and environmental protection
expenditure（envi） expenditure/total public finance expenditure
Urban and rural community affairs Urban and rural community affairs expenditure/total
expenditure（comm） public finance expenditure
Agriculture, forestry and water affairs Agriculture, forestry and water affairs
expenditure（agri） expenditure/total public finance expenditure
Transportation expenditure（tran） Transportation expenditure/total public finance
expenditure
economic development（eco） GDP per capita
Fiscal decentralization（FD） Regional per capita fiscal expenditure/province per
capita fiscal expenditure
The level of urbanization（urban） Urbanization rate
Regional scale（pop） Year-end resident population
Fixed asset investment（in） Total fixed asset investment
Urban unemployment rate（unem） Registered urban unemployment rate

The research focuses on the impact of grassroots corruption on government expenditures. The explained
variables are government expenditures, including total government public fiscal expenditures, and 12 sub-project
expenditures (including general public service expenditures, defense expenditures, public security expenditures,
1194 Su Nan et al. / Procedia Computer Science 199 (2022) 1192–1197
Su Nan/ Procedia Computer Science 00 (2017) 000–000

education expenditures, science and technology expenditures , Culture, sports and media expenditure, social
security and employment expenditure, medical and health expenditure, energy conservation and environmental
protection expenditure, urban and rural community affairs expenditure, agriculture, forestry and water affairs
expenditure, transportation expenditure)The ratio of the total local public finance expenditure to the regional
GDP is used to measure the scale of government expenditure, and the ratio of the expenditure of each sub-project
to the total expenditure of the regional public finance is used to express the expenditure scale of each sub-
project.The selected explanatory variable is the degree of grassroots corruption. Cross-regional corruption studies
often use Transparency International’s Corruption Perception Index (CPI) and the World Bank’s Governance
Index (WGI) as measurement standards. They emphasize subjective judgments on the degree of corruption, so
they often differ from the actual situation. (Zhou Li'an & Tao Jing, 2009)At present, domestic scholars mostly
use the number of corruption cases to measure the degree of grassroots corruption. The specific indicators used
include the number of official crimes filed and investigated by the People’s Procuratorate each year, the number
of official crimes filed and investigated by the People’s Procuratorate each year, and the number of official crimes
per 10,000 public officials. The number of registered cases, the ratio of the number of registered official crimes
to the local population, etc. (Niu Furong, 2016) This article uses the number of official crimes registered per
10,000 public officials to measure the degree of grassroots corruption.

3. Empirical Results and Analysis

3.1. Descriptive Statistics

Based the descriptive statistical analysis results of the main variables in this paper, among them, the average
of grassroots corruption in 21 cities and prefectures in S province is 18.06, which means the number of cases
filed by procuratorial organs to investigate work-related crimes per 10,000 public servants is 18.06.In addition,
the average ratio of regional government public financial expenditure to the regional GDP is 29%, the average
ratio of general public service expenditure to total expenditure is 11%, the average ratio of public security
expenditure is 5%, and the average ratio of education expenditure is 16. %, the ratio of expenditures on science
and technology, culture, sports, and media is 1% on average, and the ratio of social security and employment
expenditures is on average 14%, health care expenditures, energy conservation and environmental protection
expenditures, urban and rural community affairs expenditures, agriculture, forestry and water affairs expenditures,
transportation The average expenditure ratios were 8%, 3%, 5%, 12%, and 6%.This shows that in the fiscal
expenditure structure of the 21 cities and prefectures in S Province, education expenditures accounted for the
highest proportion, followed by social security and employment expenditures, general public service
expenditures, and agriculture, forestry and water affairs expenditures, while defense expenditures and science
and technology expenditures accounted for a relatively small proportion. And cultural, sports and media
expenditures.

3.2. Correlation Analysis

Before the regression of statistics, this article analyzes the relationship between grassroots corruption and
government expenditure, and the results show that there is a correlation between grassroots corruption and
government expenditure.Among the 12 branches, there is a weak positive correlation between general public
services, public safety, education, science and technology, social security and employment, urban and rural
community affairs expenditures, agriculture, forestry and water affairs, and grassroots corruption (see Figure
1);There is a weak negative correlation between national defense, culture, sports, media, transportation and the
degree of grassroots corruption; the relationship between medical and health, energy conservation and
environmental protection and the degree of grassroots corruption is not obvious.However, the scatter chart is
 Su Nan et al. / Procedia Computer Science 199 (2022) 1192–1197 1195
Su Nan/ Procedia Computer Science 00 (2017) 000–000

only a simple correlation analysis, without incorporating other control variables and economic variables, and
cannot fully accurately reflect the relationship between grassroots corruption and government expenditures. This
article will build a regression model to further verify the impact of grassroots corruption on the scale and structure
of government expenditures.

Figure 1 Scatter diagram of the relationship

between grassroots corruption and government branches (partial)

3.3. Regression Analysis Results

In order to empirically study the effect of grassroots corruption on the structure and scale of government
expenditures, we first conduct a static analysis and discussion. In panel data econometric analysis, fixed effects
model and random effects model are often used. Considering that the model may have endogeneity problems,
Hausman test was used to select an appropriate model for estimation.
From the regression coefficients of each model, the coefficient of grassroots corruption and government
expenditure is positive. It can be preliminarily believed that the increase in grassroots corruption will prompt
the government to expand fiscal expenditure.Judging from the analysis results of the 12 sub-projects of the
degree of grassroots corruption and government expenditure,corruption levels for every rise in unit, will lead to
the general public services, public security expenditure, expenditure on education, science and technology,
social security and employment spending, spending on energy conservation and environmental protection, and
the proportion of the community affairs expenses, transportation costs rise (0.05%, 0.01%, 0.05%, 0.01%,
0.06%, 0.02%, 0.07% and 0.06%)and led to a decrease in defense expenditure and medical and health
expenditure by 0.01 % And 0.06%.Among them, national defense expenditures, science and technology
expenditures, medical and health expenditures, and urban and rural community affairs expenditures passed the
significance tests of 5%, 10%, 1%, and 5% respectively, indicating that grassroots corruption has a more
significant impact on these expenditures.
In addition to the impact of grassroots corruption on government spending, fiscal decentralization,
economic development, urbanization rate, year-end permanent population, social fixed asset investment, and
1196 Su Nan et al. / Procedia Computer Science 199 (2022) 1192–1197
Su Nan/ Procedia Computer Science 00 (2017) 000–000

urban unemployment rate all affect government spending.Among them, a 1% increase in per capita GDP will
increase general public service expenditure by 0.13%, public security expenditure by 0.3%, education
expenditure by 4.78%, science and technology expenditure by 0.86%, culture, sports and media expenditure by
1.26%, medical and health expenditure by 2.61%, urban and rural communities Service expenditure is 3.03%,
agriculture, forestry and water affairs expenditure is 7.66%, and transportation expenditure is 3.08%; it will
reduce defense expenditure by 0.02%, social security and employment expenditure by 0.59%, and energy
conservation and environmental protection expenditure by 1.15%.

4. Robustness Test

The structure and scale of government expenditures change dynamically and are affected by multiple
factors, including current factors as well as past factors, and there is often a time effect. In order to improve the
interpretability of the model, this paper adds the lag term of the explained variable as an explanatory variable in
the model to construct a dynamic panel data model.Arellano and Bond pointed out that adding the lag term of
the dependent variable to the model is prone to endogenous problems. The System Generalized Moment
Estimation method (GMM) uses the lag term of the difference variable as an instrumental variable, which
effectively solves the problem of weak instrumental variables and makes the estimation results more effective.
L.t-exp, L.ub, L.DF, L.AFe, L.edu, etc. are the first order lag terms of explained variables respectively.
Table 2 show the GMM estimation results of dynamic panel data.From the regression results, the sign of
the impact of grassroots corruption on government expenditures is consistent with the static model, but the
dynamic GMM estimation method is more significant, and it has passed the 5% significance test, indicating
that with the increase in grassroots corruption , The scale of government expenditure will be further expanded,
and for every unit increase in the level of grassroots corruption, government expenditure will increase by
0.8%.Specifically, grassroots corruption degree for every rise in unit, social security and employment will
encourage spending, spending on energy conservation and environmental protection, following the transaction
expenses, transportation expenses fall (0.1%, 0.1%, 0.2%, 0.1% respectively), and make the expenditure on
education, health care expenditure, the urban and rural community affairs expenditure proportion increase
(0.2%, 0.1% and 0.1%, respectively), it shows that under the condition of the budget system imperfect,
government spending has certain reference effect on the time, the current government spending is affected by
the previous spending.At the same time, research also shows that in the process of increasing investment in
education development, health care, and community building, officials are often prone to corruption, and
government officials are more likely to obtain rent-seeking opportunities in the process of increasing
infrastructure investment. In addition, among the twelve branches, only education expenditure passed the 10%
significance test, indicating that the degree of grassroots corruption in cities has a significant impact on
education expenditure.
Table 2 GMM estimation of dynamic panel data
(1) (2) (3) (4) (5) (6) (7)
exp pub def safe edu sci cul
_cons 13.418*** 0.012 0.030 0.076 -0.247 -0.332*** -0.091
(2.062) (0.343) (0.024) (0.392) (0.470) (0.106) (0.109)
L.t-exp -0.023
(0.079)
L.pub 0.378***
(0.078)
L.def 0.466***
(0.103)
L.safe 0.340***
(0.111)
L.edu 0.247**
(0.106)
 Su Nan et al. / Procedia Computer Science 199 (2022) 1192–1197 1197
Su Nan/ Procedia Computer Science 00 (2017) 000–000

L.sci 0.120
(0.141)
L.cul 0.435***
(0.108)
corr 0.008** -0.000 -0.000 0.000 0.002* -0.000 -0.000
(0.003) (0.001) (0.000) (0.000) (0.001) (0.000) (0.000)
lneco -1.145*** -0.012 -0.003 0.001 0.024 0.024** 0.011
(0.199) (0.034) (0.002) (0.039) (0.037) (0.010) (0.010)
FD 12.888*** -0.756*** -0.005 -0.643*** -1.745*** -0.140*** -0.050
(1.080) (0.260) (0.016) (0.178) (0.399) (0.042) (0.068)
lnin 0.077 0.020 0.001 0.008 -0.003 -0.008* -0.001
(0.068) (0.015) (0.001) (0.008) (0.024) (0.004) (0.004)
unem 0.007 -0.032* -0.001 -0.037*** -0.060* 0.014*** -0.004
(0.067) (0.018) (0.001) (0.010) (0.033) (0.004) (0.004)
N 147 147 147 147 147 147 147
AR(1) 0.000 0.000 0.000 0.000 0.005 0.001 0.006
AR(2) 0.605 0.325 0.072 0.240 0.463 0.154 0.677
sarga 0.020 0.000 0.212 0.131 0.067 0.000 0.022
Note: ***, **, and * indicate significance levels below 1%, 5% and 10% respectively.

5. Conclusion

Based on the above theoretical and empirical analysis, it is found that there is a positive correlation
between the degree of official corruption and the scale of government expenditure, that is the higher the degree
of official corruption, the larger the scale of government expenditure. In view of the imperfection of China's
administrative examination and approval system and official supervision mechanism, the field of government
expenditure has become an important place for local officials to corrupt. In the process of expanding
government expenditure, officials are more likely to obtain opportunities and benefits of corruption.
The results show that increasing anti-corruption efforts will not only help to stop the occurrence and
spread of official corruption, but also help to optimize the scale and structure of government expenditure, and
improve the efficiency and allocation level of government expenditure.

6.Reference
[1] Delavallade, C. Corruption and distribution of public spending in developing countries. Journal of
Economics & Finance, 2006,30(2): 222-239.
[2] Hudson, J.& Jones, P. Corruption and Military Expenditure: at 'No Cost to the King'. Defence and
Peace Economics, 2008,19(6): 387-403.