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“That what ultimately determines the performance of institutions is not their form in terms of formality, privatization, or security, but their spatially and temporally defined function. In different wording, institutional function presides over form; the former can be expressed by its credibility, that is, the perceived social support at a given time and space. This postulate has here been dubbed the “credibility thesis”.

(Peter Ho in Land Use Policy, 2014, Vol. 40, Sept., pp. 13-4)

 

Today China has appeared as a globalizing force in every sense. At the same time, many observers’ feel that its development might come to a grinding halt or even collapse, because of its lack of political reforms, rising inequality, and rampant corruption. Contradictorily, since the start of the reforms China has exhibited relatively high socio-economic and political stability.

Funded by the European Research Council (ERC), which funds the top researchers within the European Union, the “RECOLAND” project on land and institutions in China, seeks to go beyond widely accepted dichotomous views on China’s development – be they on an impending collapse or on its booming future. Instead, it aims to analyze and explain China’s development in all its many-faceted, paradoxical dimensions. The project’s research revolves around the critical issue of China’s economic (in)stability. In so doing, the project aims to answer questions why China has been relatively stable during its more than 30 years of development, why the bubble in real estate was so difficult to control, and why social actors were willing to invest in property rights that were hugely informal, opaque and insecure.

To meaningfully study the multi-layered, contradictory dimensions of Chinese development, the project makes two choices: to study development around one of the means of production – land (apart from labor and capital), and to do so by zooming in on its governing institutional architecture. Unlike the other means of production, capital and labor, which have been increasingly privatized, land is still one of the last vestiges of Chinese communism. As such, it is central to the Chinese leadership’s decisions about the nation’s future.

Against the backdrop above, the project looks into four types of land (urban land, rural land, mining land and grassland, which together represent the full gamut of China’s property rights structure), and delves into the major issues that affect it – speculation in urban real estate; landlessness and urban sprawl; rent-seeking and forced evictions; and distributional conflict. It is hypothesized that China can maintain overall stability despite the rising conflict and inequality due to the credibility of its institutions. “Credibility” was coined in economics and political science, yet, in general has been little researched, let alone, in the case of land-based institutional change.

The project hypothesizes that when it comes down to successful institutions it is the level of credibility that matters, not the extent of formality, security or privatization. In other words, it is not the FORM of institutions that matter, but their FUNCTION. This approach that the project chooses and the notion of credibility are postulated to be closely intertwined with the dynamics of development. The RECOLAND project aims to demonstrate that China is a powerful case in point.

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