In China, roughly 60% of GDP and 80% of employment comes from the private sector – yet half of private entrepreneurs report that they faced expropriation of property by local governments.
In her book, The Private Sector in Public Office: Selective Property Rights in China
(Cambridge University PRess, 2020), Yue Hou
documents how private entrepreneurs protect their property from expropriation by running for office – and using their public
roles to advance their private
economic interest. Entrepreneurs who hold local legislative seats can leverage their political status to deter predatory behavior by lower-level bureaucrats who fear retribution or punishment from the legislator’s political network. Joining local legislatures allows private owners to creatively build a system of selective – yet effective – property rights in the short (and maybe medium) term.
Hou’s research combines quantitative and qualitative methods including interviews with entrepreneurs, legislators, and audit experiments – in a political environment in which people are often risk-averse and politically sensitive. The book lays out the logic of selective property rights within authoritarian regimes, explores what entrepreneurs do once they hold legislative office, and how effective this strategy is for securing property rights (spoiler, it is effective).
The podcast concludes with Hou’s describing how private entrepreneurs have provided crisis relief for COVID-19 in China.
Susan Liebellis associate professor of political science at Saint Joseph’s University in Philadelphia. She is the author of Democracy, Intelligent Design, and Evolution: Science for Citizenship