Thursday, April 21, 2011

What China Can Learn From Corruption and Property Disputes in the US

In my post "Humiliation and Disgrace: Interfering with China's Attempts to Improve its Image and the Lives of its People" I shared several examples highlighting the roles "humiliation" and "disgrace" can play in China and how they may lead to self-defeating actions.

I've received some interesting feedback and would like to reply to one of the comments posted here.  "Jeff" wrote:
"Regarding the sensitivity about eminent domain issues, could it have anything to do with the reliance of local gov'ts on kickbacks and fees associated with property development?

To say that other countries in the world have similar issues is to ignore a systemic pathology that, if not unique to China, has certainly entrenched itself into the political economy."
My answer to the question in Jeff's comment is "yes" if speaking of the Chinese Government's sensitivity about the issue in general.  Many Chinese I have spoken to would readily agree that corruption has "entrenched itself into the political economy" in China (see here for an example regarding Google).  The Chinese Government likely wants to provide the image it is addressing such issues and avoid highlighting potential problems.  The Chinese Government's sensitivity could also be a result of the notable cases of strong resistance to forced relocation by Chinese people -- sometimes with deadly results.  However, I should note that the Chinese press was allowed to report on the relocation issue referenced in my earlier post and I'm not aware of any specific claims of corruption in that case.

Regardless, even if no corruption were involved in forced relocation in China I believe the issue would remain a potential embarrassment in international terms for many Chinese.  For example, in the conversation with the policeman referenced in the earlier post, while he mentioned government corruption, it was never brought up in regards to the issue of forced relocation.  Based on his words and the emotions he displayed, what he worried would cause China disgrace in the eyes of the world was that people were forced from their own homes and provided insufficient money as compensation to purchase similar ones.  I do suspect, though, that his concerns about China's image would have also caused him to not want the foreign press covering corruption in the Chinese Government.

In response to the second part of Jeff's comment, when I wrote that "similar issues of eminent domain, though not on the same scale, come up in many countries around the world and are openly discussed" I meant "similar" in the sense that the cases involved people who felt they were unfairly being forced to move -- whether the forced move was primarily caused by corruption or the government taking action for "public use".

I should also note that in many cases in China forcing people out of their homes isn't technically an issue of "eminent domain" since the land is owned by the Chinese Government (or local governments) in the first place.  Law professor Dan Cole touches on this issue in his post "Eminent Domain and Corruption in China: A Murderous Combination" in which he comments on a case of forced relocation in China that had gruesome results.

However, while it may not be surprising to many that corruption has played a role in forced relocations in China, it may come as a surprise that it may play a role in countries such as the US as well.

The US Supreme Court in Kelo v. City of New London (545 U.S. 469 [2005]) ruled that eminent domain could apply even if the land was being taken over by a private entity if there could be some demonstrated benefit to the public such as increasing the tax base or providing more jobs for the the area.  According to the US Supreme court, it is possible for people to be forced out of their home for the construction of a shopping mall, just as it is for people in China.  This point is important because the possibility of using eminent domain for the transfer of property to a private entity may increase the potential for corruption.  In fact, there is research suggesting just this: "eminent domain use for private benefit is more widely used in [US] states with: (a) higher rates of corruption, (b) appointed Supreme Court justices, (c) less fiscal decentralization, and (d) lower economic freedom" (referenced research by Carrie B. Kerekes here, more recent paper here).

My aim isn't to say that the scope of corruption in such cases is at all similar in the US and China but merely that my statement that the issue differs in regards to scale may hold even in this sense.  I don't believe this negates what many Chinese themselves will say: corruption is rampant in many parts of the Chinese Government, and it is a very significant problem.

Finally, in Dan Cole's post he also discusses how the open nature of the media and the political process in the US helped lead to the creation of further protections for property owners after the Kelo ruling (a ruling which disappointed many people in the US).  It can be a sign to the Chinese people that when foreign governments such as the US advocate for more openness in China, it isn't just because those governments believe they have something to gain, but that they sincerely believe that a more open China would be to the benefit of the Chinese people and better able to fix the problems of most concern to the Chinese people -- even those problems which they now fear could cause them humiliation and disgrace.

1 comment:

  1. It seems to me that the construction industry is behind a huge amount of the corruption here in China and have a very deep reach into government affairs. I'm not sure how this will play out, but it is causing a lot of suffering and a ton of unnecessary and shoddy construction projects everywhere you look.