Yes it is conventional wisdom of corruption that the latter may be reduced with the expansion of rule based and more market oriented institutions. It is also widely accepted that the role of corruption, in part, has been contributive to economic growth in East Asia. Are these compatible? By way of explaining the role of corruption for distinctive economic accomplishment for a short period in East Asia; I will develop the essay showing that it is due to other factors/reasons and not because the East Asian states lacked the aforementioned institutions and rules to tackle corruption that it was widespread but, fortunately and unexpectedly (unintentionally – D. Kang, said it!), was to their economic growth.
Caution! By definition, corruption is inherently evil!
As we will discuss below, the fact that corruption in the history of some selected East Asian countries, at macro level, has facilitated their growth does not imply: a) it harms no one in the country b) some individuals have not gained undue advantage c) it can be officially adopted by a country as a viable economic growth model d) at micro level honest and law abiding businesspersons are not disadvantaged as their competitors enjoyed special treatment by the corrupt government officials.
There are several explanations why corruption has not affected their growth rather facilitated their economic performance.
According to Wedeman (P.3), although it is widely assumed that corruption has negative consequences, the fact remains that the Chinese economy, despite the existence of corruption, has performed remarkably well. Between 1979 and 2002 the Chinese economy outperformed the rest of the world by a factor of ten, with GDP growing 500.8 per cent in real per capita terms versus a global average of 44.6 per cent. According to Shliefer and Vishny, the negative consequences of hierarchically organized high-level corruption ought to be less than anarchic low-level corruption because high-level corruption is generally more predictable and hence reduces risk and transaction costs. If so, then the apparent contradiction between "worsening" corruption and China's extraordinarily high rate of growth might be, in part, a function of reductions in low-level corruption and the forging of a collusive relationship between high-ranking cadres and the emerging business community, wherein those with political power have material incentives to facilitate profit-making by their "business partners." (Wedeman, P.28)