Despite the well-known observation that economic liberalization has resulted in rising corruption in emerging markets, few works have systematically studied the linkages between the two phenomena. This book tackles the task by examining the interactions between the evolving courses of economic reform and the changing causes/consequences of corruption in post-Mao China . Contrary to those who blame the lingering role of the state or the ruling party, this book argues that recent corruption is largely a byproduct of post-Mao economic reforms, spurred by the economic incentives and structural opportunities in the emerging marketplace. Contrary to the neo-liberal euphoria over the “invisible hands” of the market, the book shows that the steady retreat of the state has both increased mechanisms for cadre misconduct and reduced disincentives against it. Contrary to the standard efficiency arguments about corruption's effects on economic development, this study shows that corruption may co-exist with successful economic reforms and growth in the short run through unintended and informal mechanisms. Over time, however, these mechanisms may take on a life of their own and undermine the central state's ability to implement its developmental policies, discipline its staff, enforce its regulatory infrastructure, and fundamentally transform the economy.