Rights-Weakening Federalism

Abstract

Abstract This paper sheds light on the dark side of China’s de facto federalism: the weakening of individual rights as a cost of economic development, in other words “rights-weakening federalism.” More specifically it argues that de facto local autonomy in land administration and inter-jurisdictional competition have weakened individual land rights in China. Land laws in China, particularly the basic land institutions, are reserved for the national authority, the national legislature in particular. Local governments are supposed to implement national laws without any deviation, but have created a variety of property institutions, ranging from ownership and alienation to eminent domain, in violation of China’s Constitution, Property Law, and a number of other national laws. These “local government outlaws” are weakening individual rights because interjurisdictional competition benefits industrial investors, which can exercise both the right to exit, or at least threatening to exit, and the right to voice, using Albert Hirschman’s dichotomy. Individual property owners, in contrast, whether urban housing owners or rural farmers, cannot effectively threaten to exit, and nor can they routinely participate in local politics in a non-democratic country. The contrast between a national property law system that endeavors to strengthen individual rights and local government outlaws acting to weaken those rights provides a clear case against the argument that local governments protect individual rights better than the national government.