This is a practice job talk.
Researchers have long-standing interests in whether specific anti-corruption strategies are effective in reducing corruption. However, the wider impact of anti-corruption effort on the state remains relatively under-studied. I argue that anti-corruption effort may reduce productivity of bureaucrats by frightening them away from informal practices that would otherwise help efficiently accomplish tasks. Utilizing a unique dataset, I identify this ``chilling effect'' by exploiting variation in the timing of sub-provincial anti-corruption inspections in China from 2012 to 2017. I show that anti-corruption efforts lower the area of land development projects proposed by bureaucrats. Causal mediation analyses with investigation data and original measures of corruption potential reveal that these effects are unlikely driven by reduction of actual corruption. Extension analyses suggest similar consequences on revenue collection and environmental regulation. Although scholars of state-building equate low corruption with effective bureaucracy, these findings present a paradox where efforts to lower corruption may further undermine bureaucracy.