Organizational Performance and Institutional Capacity in China’s Property Regime(s)

Distinct from but not unrelated to normative interchange, institutional capacity is an important factor in legal regime performance.122 The operation of the Chinese legal regime depends on the Party/state’s instrumentalist use of law to pursue policy goals and to maintain political dominance. Law is not intended as a limit on state power but rather is a mechanism by which state power is exercised. As a result the capacity of institutions to implement legal rules is critical. Institutional Capacity describes the ability of institutions to perform assigned tasks in the context of local political and socioeconomic conditions.123

Elements of institutional purpose, location, orientation, and cohesion are particularly important indicators of Institutional Capacity. Institutionalpurpose concerns the goals of institutional behavior, and the way these reflect consensus and conflict among communities in which institutions operate. Thus, the capacity of local governance institutions to implement new standards on property relations depends on the degree of clarity and consensus regarding policy objectives. Institutional capacity also depends on issues of institutional location, particularly the question of balancing central authority with local power.124 In China, practical divisions of power and authority between local and central government departments permit a degree of policy interplay between the central and sub-national governments that reveal marked differences of perspective and practice and affect institutional capacity.125 Institutional capacity also depends on institutional orientation, namely, the priorities and habitual practices of institutions. Tensions between formal and informal approaches to recognition and enforcement of property rights standards are important examples of institutional orientation.126 Finally, institutional capacity depends on issues of institutional cohesion, involving the willingness of individuals within institutions to comply with edicts from leaders and to enforce institutional goals. In the context of implementing newly enacted property rights standards at the local level, institutional cohesion often reflects issues of human resource management and administrative discipline. Thus, the structural features of institutional capacity provide an organizational counterpoint to the normative features of Selective Adaptation.

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