The Evolution of Relational Property Rights: A Case of Chinese Rural Land Reform

Abstract

The most notable, or at least the most noted, form of property evolution has been the transfer of exclusive rights from collectives to individuals and vice versa, such as the farm collectivization in Soviet Union and the establishment of the People’s Communes in Mao’s China and their reversals. Such radical moments, however, constitute only a small part of history. For the most part, property rights evolve quietly and incrementally, which is hard to explain if we take exclusive rights as the core of property, or, to put it more generally, if we are focusing solely on the question of who owns the things. To describe the evolution of property rights in China, we employ the concept of relational property. It is a concept that is heavily influenced by Joseph William Singer’s “social relations model” and Ian Macneil’s “relational contract” and, in particular, their emphasis on the determinative role of social relations in the construction of property and contract rights. The bundle of sticks metaphor is at the heart of relational property because it recognizes that property rights can be, and often are, disaggregated as they adapt to changing social, economic, and technological demands. As we show in the context of the reform of Chinese rural land, the combination of the metaphor of separable interests — the sticks in the bundle — and the dependence of property interests on social relationships can explain the evolution of property rights more accurately than a perspective that stresses a single central meaning of property.