Chinese rights in terms of property and economic miracle

Professor Deepak Lal writes in BS “Bureaucrats become capitalists with the right set of incentives”

Interestingly he note that “the Chinese had evolved a form of local bureaucratic competition based on granting ‘use’ rights to urban and industrial land without the need for corruption. At the heart of this was the evolution of a set of incentives provided to bureaucrats in xians (municipalities) to act like landlords selecting and granting share-cropping contracts to investors. The economic power of the xians lay in their sole right to decide and allocate the use of land. This right did not belong to villages, towns, cities, provinces or even Beijing. The xians are part of seven geographically determined layers: country, provinces, cities, xians, towns, villages and households. These layers are vertically linked by responsibility contracts (which, from their Chinese name, imply, “guarantee what I want and you can do what you want”). But horizontally, there are no contractual links and they are free to compete”.