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Drawing on insights from sociology and new institutional economics, Extralegal Governance provides the first comprehensive account of China's illegal markets by applying a socio-economic approach. It considers social legitimacy and state repression in examining the nature of illegal markets. It examines how power dynamics and varying levels of punishment shape exchange relationships between buyers and sellers. It identifies context-specific risks and explains how private individuals and organizations address these risks by developing extralegal governance institutions to facilitate social cooperation across various illegal markets. Adopting a multiple-case study design to sample China's illegal markets, this book utilizes four cases - street vending, small-property-rights housing, corrupt exchanges, and online loan sharks - to examine how market participants foster cooperation and social order in illegal markets.
This chapter reviews essential works on anarchism and extralegal (private) governance institutions, suggesting that there is a lack of high-quality research focusing on the operation of extralegal governance institutions in authoritarian China’s illegal markets. It then discusses the puzzles this book aims to investigate and the ways in which the Chinese state facilitates the growth of illegal markets. It also outlines the objectives of the book, summarizes the key contributions it makes to the existing literature, and sets out a road map for the book.
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