EVEN by Chinese standards, growth in the southern city of Jieyang was remarkable under Wan Qingliang, the local boss with bouffant hair who cultivated an air of frugality in his personal life. When he took over, in 2004, annual expansion was 4%. By 2007 Jieyang's growth rate had surged to 18%. Dirt roads were paved, banana groves uprooted and high-rises planted in their place. Propelled by these achievements, Mr Wan's ascent up China's political ranks was swift. He was made vice-governor of Guangdong, China's wealthiest province, and then mayor of Guangzhou, the province's capital and China's third-biggest city.

Yet Mr Wan's fall was even more precipitous than his rise. In June investigators accused him of widespread corruption; he has disappeared from sight. The man who said he owned no homes allegedly dispensed favours worth at least 600m yuan ($97m) to one property developer, Comhope, and the charge sheet is growing. But the takedown of Mr Wan, who knew how to get the local economy fizzing, raises a question about President Xi Jinping's fight against corruption: is it a drag on growth?

The scars of Mr Xi's campaign are visible in Jieyang. At a Comhope complex down by the river, bamboo scaffolding lies in a heap at the base of what were supposed to be 30-storey towers―construction was abandoned at the 11th floor. Across China, luxury retailers and fancy restaurants are suffering from an edict against wasteful government spending. A chill has crept into karaoke parlours and brothels; mistresses also face a hard time. One maker of condoms estimates demand has fallen in China by 1m condoms a day in recent months. In June casino revenues fell in Macau, a popular destination for cadres, for the first time in years. The government has made it harder to transfer cash to the gambling enclave.

When the economy wobbled early this year, one common explanation was that officials were reluctant to approve investment projects lest they be accused of taking backhanders. Some executives with state-owned enterprises do not want to travel abroad, for fear that enemies will portray such trips as junkets. After rising strongly for a decade, foreign direct investment by Chinese companies fell by 5% in the first six months of the year, compared with a year earlier.

Businesses are adapting to more abstemious times. Five-star hotels, now virtually off-limits to officials, have downgraded themselves to four stars. Private dining clubs have opened their doors to the public. Still, the view that anti-corruption efforts are hurting the economy has become pervasive enough for leaders to confront it head-on. In July Lou Jiwei, the finance minister, said that those who think corruption helps lubricate growth are "making fools of themselves".

He has a point. For all the short-term dislocations, the crackdown is surely good for China's economy. Most economists these days no longer regard corruption as greasing the wheels of business in developing economies, as used to be argued. Rather, they realise, it deters private investment, misallocates resources and generates social grievances.

China's past anti-graft campaigns, though admittedly less extensive than the current one, hurt the economy little and may even have boosted it. Investigations directed at the local government of Beijing in 1995 and of the port-city of Xiamen in 1999 coincided with growth slowdowns of roughly three percentage points. Both cities quickly recovered. When Shanghai's party chief was toppled in 2006, growth accelerated the following year. Across China, counties that are strongly against corruption tend to have higher incomes than those that go easy on sleaze, according to research by Yiping Wu of the Shanghai University of Finance and Economics and Jiangnan Zhu of the University of Hong Kong.

Not that the anti-graft campaign is necessarily encouraging open and transparent behaviour. In Sihong county in Jiangsu province this month, authorities panicked when they heard that inspectors from the central government were coming. Having illegally converted farmland into highways, the bureaucrats carted in lorryloads of soil overnight to cover them up. Photos of the buried roads, now planted with soyabeans, have since become something of a hit around the country.