IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v161y2023ics0305750x22003011.html
   My bibliography  Save this article

Strategizing actors and agents in the functioning of informal property Rights: The tragicomedy of the extralegal housing market in China

Author

Listed:
  • Lin, Wanlin
  • Lin, George C.S.

Abstract

This paper engages with the ongoing theoretical enquiry into the actual functioning and diverse practices of informal property rights. Departing from the prevailing neoliberal perspective and the credibility thesis, this paper develops a framework of institutional analysis to understand the functioning and regional variation of informal property rights. It takes the institutions-as-equilibria perspective and situates both structural and endogenous institutional variables in actors’ strategic choices. We test our conceptual framework through a multisite empirical study of extralegal and untitled housing in China. Building on game theory, archival research, and fieldwork, we compare the key variables contributing to the divergent fortunes of extralegal and untitled housing property rights in three Chinese cities: prospering in Shenzhen, selectively interfered with in Beijing, and eliminated in Sanya. The functioning of informal property rights is found to be contingent upon diverse strategic interactions of local governments and key local stakeholders. Our paper highlights the formation of local actors’ behavioral beliefs and their adjustment through a nonlinear feedback mechanism. It suggests the necessity and significance of integrating structural and endogenous institutional variables, elaborating on the interplay of formal and informal institutions, and applying the microeconomic and dynamic perspectives to better understand the functioning and diverse practices of informal property rights in the developing world.

Suggested Citation

  • Lin, Wanlin & Lin, George C.S., 2023. "Strategizing actors and agents in the functioning of informal property Rights: The tragicomedy of the extralegal housing market in China," World Development, Elsevier, vol. 161(C).
  • Handle: RePEc:eee:wdevel:v:161:y:2023:i:c:s0305750x22003011
    DOI: 10.1016/j.worlddev.2022.106111
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X22003011
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2022.106111?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Boettke, Peter J. & Coyne, Christopher J., 2009. "Context Matters: Institutions and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(3), pages 135-209, March.
    2. Pennington, Mark, 2013. "Elinor Ostrom and the robust political economy of common-pool resources," Journal of Institutional Economics, Cambridge University Press, vol. 9(4), pages 449-468, December.
    3. Lai, Yani & Wang, Jiayuan & Lok, Waiming, 2017. "Redefining property rights over collective land in the urban redevelopment of Shenzhen, China," Land Use Policy, Elsevier, vol. 69(C), pages 485-493.
    4. Taisu Zhang & Xiaoxue Zhao, 2014. "Do Kinship Networks Strengthen Private Property? Evidence from Rural China," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(3), pages 505-540, September.
    5. Greif, Avner & Laitin, David D., 2004. "A Theory of Endogenous Institutional Change," American Political Science Review, Cambridge University Press, vol. 98(4), pages 633-652, November.
    6. Paul Cairney, 2012. "Complexity Theory in Political Science and Public Policy," Political Studies Review, Political Studies Association, vol. 10(3), pages 346-358, September.
    7. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521480444, November.
    8. Hsing, You-tien, 2010. "The Great Urban Transformation: Politics of Land and Property in China," OUP Catalogue, Oxford University Press, number 9780199568048, Decembrie.
    9. Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-672, June.
    10. Mehrdad Vahabi, 2016. "A positive theory of the predatory state," Public Choice, Springer, vol. 168(3), pages 153-175, September.
    11. Mantzavinos,C., 2004. "Individuals, Institutions, and Markets," Cambridge Books, Cambridge University Press, number 9780521548335, November.
    12. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    13. Ya Ping Wang & Yanglin Wang & Jiansheng Wu, 2009. "Urbanization and Informal Development in China: Urban Villages in Shenzhen," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(4), pages 957-973, December.
    14. Hui Cheng & David Shaw, 2018. "Polycentric development practice in master planning: the case of China," International Planning Studies, Taylor & Francis Journals, vol. 23(2), pages 163-179, April.
    15. Cai, Meina & Murtazashvili, Ilia & Murtazashvili, Jennifer, 2020. "The politics of land property rights," Journal of Institutional Economics, Cambridge University Press, vol. 16(2), pages 151-167, April.
    16. Bronk,Richard, 2009. "The Romantic Economist," Cambridge Books, Cambridge University Press, number 9780521735155, November.
    17. Tsai, Lily L., 2007. "Solidary Groups, Informal Accountability, and Local Public Goods Provision in Rural China," American Political Science Review, Cambridge University Press, vol. 101(2), pages 355-372, May.
    18. Ho, Peter, 2018. "A theorem on dynamic disequilibrium: Debunking path dependence and equilibrium via China’s urban property (1949–1998)," Land Use Policy, Elsevier, vol. 79(C), pages 863-875.
    19. Farber, Daniel A, 2002. "Rights as Signals," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 83-98, January.
    20. Shen, Xiaoxiao & Tsai, Kellee S., 2016. "Institutional Adaptability in China: Local Developmental Models Under Changing Economic Conditions," World Development, Elsevier, vol. 87(C), pages 107-127.
    21. Tellman, Beth & Eakin, Hallie & Janssen, Marco A. & de Alba, Felipe & Turner II, B.L., 2021. "The role of institutional entrepreneurs and informal land transactions in Mexico City’s urban expansion," World Development, Elsevier, vol. 140(C).
    22. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    23. He, Shenjing & Wang, Dong & Webster, Chris & Chau, Kwong Wing, 2019. "Property rights with price tags? Pricing uncertainties in the production, transaction and consumption of China’s small property right housing," Land Use Policy, Elsevier, vol. 81(C), pages 424-433.
    24. Fan, Xin & Qiu, Sainan & Sun, Yukun, 2020. "Land finance dependence and urban land marketization in China: The perspective of strategic choice of local governments on land transfer," Land Use Policy, Elsevier, vol. 99(C).
    25. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December.
    26. Jieming Zhu, 2002. "Urban Development under Ambiguous Property Rights: A Case of China’s Transition Economy," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(1), pages 41-57, March.
    27. Peter Lorentzen & M Taylor Fravel & Jack Paine, 2017. "Qualitative investigation of theoretical models: the value of process tracing," Journal of Theoretical Politics, , vol. 29(3), pages 467-491, July.
    28. Murtazashvili, Ilia & Murtazashvili, Jennifer, 2016. "The origins of private property rights: states or customary organizations?," Journal of Institutional Economics, Cambridge University Press, vol. 12(1), pages 105-128, March.
    29. Mengzhu Zhang & Shenjing He, 2020. "Informal Property Rights as Relational and Functional: Unravelling the Relational Contract in China's Informal Housing Market," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 44(6), pages 967-988, November.
    30. Moberg, Lotta, 2015. "The political economy of special economic zones," Journal of Institutional Economics, Cambridge University Press, vol. 11(1), pages 167-190, March.
    31. Schneider, Mark & Teske, Paul, 1992. "Toward a Theory of the Political Entrepreneur: Evidence from Local Government," American Political Science Review, Cambridge University Press, vol. 86(3), pages 737-747, September.
    32. Brown, Alison, 2015. "Claiming the Streets: Property Rights and Legal Empowerment in the Urban Informal Economy," World Development, Elsevier, vol. 76(C), pages 238-248.
    33. Eric D. Beinhocker, 2013. "Reflexivity, complexity, and the nature of social science," Journal of Economic Methodology, Taylor & Francis Journals, vol. 20(4), pages 330-342, December.
    34. Che, Jiahua & Qian, Yingyi, 1998. "Institutional Environment, Community Government, and Corporate Governance: Understanding China's Township-Village Enterprises," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(1), pages 1-23, April.
    35. George Lin, 2009. "Scaling-up Regional Development in Globalizing China: Local Capital Accumulation, Land-centred Politics, and Reproduction of Space," Regional Studies, Taylor & Francis Journals, vol. 43(3), pages 429-447.
    36. Pengjun Zhao & Mengzhu Zhang, 2016. "The Role of Villages and Townships in Informal Land Development in China: An Investigation on the City Fringe of Beijing," Sustainability, MDPI, vol. 8(3), pages 1-21, March.
    37. Holcombe, Randall G, 2002. "Political Entrepreneurship and the Democratic Allocation of Economic Resources," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 143-159, June.
    38. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    39. Ananya Roy, 2011. "Slumdog Cities: Rethinking Subaltern Urbanism," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 35(2), pages 223-238, March.
    40. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, December.
    41. Ayse Pamuk, 2000. "Informal Institutional Arrangements in Credit, Land Markets and Infrastructure Delivery in Trinidad," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 24(2), pages 379-396, June.
    42. Leeson, Peter T. & Harris, Colin, 2018. "Wealth-destroying private property rights," World Development, Elsevier, vol. 107(C), pages 1-9.
    43. Webster, Chris & Wu, Fulong & Zhang, Fangzhu & Sarkar, Chinmoy, 2016. "Informality, property rights, and poverty in China’s “favelas”," World Development, Elsevier, vol. 78(C), pages 461-476.
    44. Ayse Pamuk, 2000. "Informal Institutional Arrangements in Credit, Land Markets and Infrastructure Delivery in Trinidad," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 24(2), pages 379-496, June.
    45. Bronk,Richard, 2009. "The Romantic Economist," Cambridge Books, Cambridge University Press, number 9780521513845, November.
    46. Huang,Yasheng, 2008. "Capitalism with Chinese Characteristics," Cambridge Books, Cambridge University Press, number 9780521898102, November.
    47. Frank R. Baumgartner & Christian Breunig & Christoffer Green‐Pedersen & Bryan D. Jones & Peter B. Mortensen & Michiel Nuytemans & Stefaan Walgrave, 2009. "Punctuated Equilibrium in Comparative Perspective," American Journal of Political Science, John Wiley & Sons, vol. 53(3), pages 603-620, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, November.
    2. Yang, Chen & Qian, Zhu, 2022. "The complexity of property rights embedded in the rural-to-urban resettlement of China: A case of Hangzhou," Land Use Policy, Elsevier, vol. 122(C).
    3. Gregory W. Caskey & Ilia Murtazashvili, 2022. "The predatory state and coercive assimilation: The case of the Uyghurs in Xinjiang," Public Choice, Springer, vol. 191(1), pages 217-235, April.
    4. Meina Cai & Jianyong Fan & Chunhui Ye & Qi Zhang, 2021. "Government debt, land financing and distributive justice in China," Urban Studies, Urban Studies Journal Limited, vol. 58(11), pages 2329-2347, August.
    5. Mengzhu Zhang & Shenjing He, 2020. "Informal Property Rights as Relational and Functional: Unravelling the Relational Contract in China's Informal Housing Market," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 44(6), pages 967-988, November.
    6. Jiejing Wang, 2020. "Urban government capacity and economic performance: An analysis of Chinese cities," Environment and Planning A, , vol. 52(5), pages 981-1004, August.
    7. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02276709, HAL.
    8. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    9. Meina Cai & Ilia Murtazashvili & Jennifer Murtazashvili & Raufhon Salahodjaev, 2020. "Individualism and governance of the commons," Public Choice, Springer, vol. 184(1), pages 175-195, July.
    10. Salter, Alexander William & Young, Andrew T., 2018. "A theory of self-enforcing monetary constitutions with reference to the Suffolk System, 1825–1858," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 13-22.
    11. Hudik, Marek, 2021. "Push factors of endogenous institutional change," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 504-514.
    12. Caballero, Gonzalo, 2015. "Community-based forest management institutions in the Galician communal forests: A new institutional approach," Forest Policy and Economics, Elsevier, vol. 50(C), pages 347-356.
    13. Cai, Meina & Murtazashvili, Ilia & Murtazashvili, Jennifer, 2020. "The politics of land property rights," Journal of Institutional Economics, Cambridge University Press, vol. 16(2), pages 151-167, April.
    14. Fulong Wu, 2016. "China's Emergent City-Region Governance: A New Form of State Spatial Selectivity through State-orchestrated Rescaling," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 40(6), pages 1134-1151, November.
    15. Cecchi, Francesco & Melesse, Mequanint Biset, 2016. "Formal law and customary change: A lab-in-field experiment in Ethiopia," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 67-85.
    16. Feng, Xunan & Johansson, Anders C. & Zhang, Tianyu, 2014. "Political participation and entrepreneurial initial public offerings in China," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 269-285.
    17. George CS Lin & Amy Y Zhang, 2015. "Emerging spaces of neoliberal urbanism in China: Land commodification, municipal finance and local economic growth in prefecture-level cities," Urban Studies, Urban Studies Journal Limited, vol. 52(15), pages 2774-2798, November.
    18. Besley, Timothy & Ghatak, Maitreesh, 2010. "Property Rights and Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4525-4595, Elsevier.
    19. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269.
    20. Paul Minard, 2020. "Institutions and China's comparative development," Papers 2001.02804, arXiv.org.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:161:y:2023:i:c:s0305750x22003011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.