Markets, Migrants and Institutional Change: The Dynamics of China's Changing Huji System, 1978-2007

This research seeks to understand how institutions of governance are adapting to the changing conditions arising from the large scale internal migrations as a result of the growth of the market economy in China. The primary focus is explaining continuity and change in the formal institutional arrangements of the huji system over the period of study (1978-2007).  During China's 'static decades' (late 1950s - late 1970s), internal migration was heavily restricted, regulated and controlled by state planning and state allocation of public resources to the point where internal migration was for most limited to political migrations. The mechanism for controlling population movements was and largely still remains the 'household registration/huji/hukou system' but since the policy of 'reform and opening', the number of people involved in spontaneous, nonsanctioned and 'outside the plan' economic migrations has grown rapidly. Most scholars agree that there are now well over 140 million nongmingong (rural workers), residing in Chinese cities without 'urban household registration'. This research acknowledges the politico-economic dynamics of this contemporary increase, specifically the reintroduction of market economics, integration into the global economy and the geopolitical dispersion of foreign capital, and seeks to investigate how huji management has been adapted to the challenge of 'temporary' residents in urban areas. Liberal economic arguments view the huji system as a hangover of the command economic functioning of central planners and an impediment to economic growth and development. However, the sustained period of rapid economic growth over the period of study suggests the role of huji management in development needs to be reconsidered. This study seeks to ascertain what role the huji system has played in this development and explain how and why it has survived and adapted this revolutionary upheaval. Data is generated from hukou statistics, laws, directives and regulations as well as migration, urbanisation and economic indicators to demonstrate the exact nature of the relationship between domestic economic development, the movement of migrants and changes in law, government policy and regulations regarding people's movement and residency. From this data the major changes are presented, including liberalisation of labour migration, some liberalisation of hukou transfer, decentralisation of hukou decision-making, and a general prioritising of the modern values of efficiency and equality, though far more the former than the latter. From these findings a model of formal institutional change in China's huji system is developed outlining a dynamic process of change that occurs due to a gap between informal institutional practices and formal institutional arrangements brought about by changing socio-economic conditions and an evolving institutional culture. The research gives us a better understanding of the dynamics of institutional change in a transitional society, contributes to institutionalist studies of change and provides well needed insight into the institutional foundations of the Chinese developmental state.