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Full-Text Articles in Economics
China At The Crossroads, Singapore Management University
China At The Crossroads, Singapore Management University
Perspectives@SMU
When villagers in Wukan village (乌坎) in Southern China protested against illegal land grabs in September 2011, it highlighted a main source of tension in China: the displacement of rural Chinese by rapid urbanisation, sometimes done illegally. The Seige of Wukan was a case in point, where local Communist Party officials had sold communally held farmland
Contract Enforcement: A Political Economy Model Of Legal Development, Fali Huang
Contract Enforcement: A Political Economy Model Of Legal Development, Fali Huang
Research Collection School Of Economics
In an effort to understand why the relative usage of relational and legal contracts differs across societies, this article builds a political economy model of legal development where legal quality of contract enforcement is a costly public good. It finds that legal investment tends to be too small under elite rule but too large under majority rule in comparison with the socially optimal level. Furthermore, elite rule, low legal quality, and high-income inequality may form a self-perpetuating circle that hinders economic development. In contrast to the conventional view, this article suggests that the often-observed association between heavy reliance on relational …