Informal Property Rights as Relational and Functional: Unravelling the Relational Contract in China's Informal Housing Market

Mengzhu Zhang and Shenjing He

International Journal of Urban and Regional Research, 2020, vol. 44, issue 6, 967-988

Abstract: In the face of state‐led land grabs, enterprising Chinese peasants have started a revolution in the ambiguous and insecure rural tenure system by developing an extralegal property system known as the small property right (SPR). Using the SPR, peasants are able to capitalize on their property through the sale of houses built on collectively owned land. Little is known, however, about the specific process behind the development of the SPR by the peasants, or how this extralegal property system functions in terms of securing the use and transfer of property without the backing of law. This article aims to clarify the situation through the lenses of the Endogenous Nature of Institutions and Relational Contract Theory, aiming to understand the socially constructed, endogenous and relational nature of the property rights that make SPR functional. Based on an ethnographic investigation of Beijing's largest SPR housing settlement, we show how enterprising peasants develop long‐term relational contracts with urban households for the provision of housing services, secured on the basis of the common interests and symbiosis of the two parties and a reputation system that serves to deter defaults. The discretionary treatment of SPR housing by local states serves as a further motivation for the village and the informal homeowners to preserve a stable property arrangement, with such a specific institutional setting being an exemplar of China's pragmatic state entrepreneurialism.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/1468-2427.12927

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ijurrs:v:44:y:2020:i:6:p:967-988

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0309-1317

Access Statistics for this article

International Journal of Urban and Regional Research is currently edited by Alan Harding, Roger Keil and Jeremy Seekings

More articles in International Journal of Urban and Regional Research from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().