Why Do They Not Comply with the Law? Illegality and Semi-Legality among Rural-Urban Migrant Entrepreneurs in Beijing


  • This article is partly based on the author's doctoral dissertation, “Why Do They Not Obey the Law? A Case Study of a Rural-Urban Migrant Enclave in China” (He 2004b). This study has been supported by the Asia/Pacific Scholars Program at Stanford University, a summer research grant (1999) from the Yale China Law Center, and a Small Scale Grant from City University of Hong Kong. The author wishes to thank Mariano-Florentino Cuellar, Lawrence M. Friedman, Deborah Hensler, Carol Jones, Herbert Kritzer, Stanley Lubman, Mike McConville, Rogelio-Perez Perdomo, Joseph Sanders, and several anonymous reviewers for their critical but constructive comments on earlier versions of the article. The author also wants to acknowledge the fine research assistance from Chu Mingyan (Rachel), Ling Bing, Liu Zhong, Ge Lei, and Zhang Ming.

Please address correspondence to Xin He, School of Law, City University of Hong Kong, Hong Kong, China; e-mail: lwxin@cityu.edu.hk.


Based on in-depth interview materials, this article examines why most rural-urban migrant entrepreneurs in Beijing do not fully comply with a discriminatory license requirement, and in particular, why they prefer license-renting from the locals. This article suggests that the law's lack of legitimacy adds weight to instrumental considerations. But more important, this license-renting practice seems to be reinforced and sustained institutionally by local businesses, law enforcement officers, and the local authorities, because their interests are inextricably intertwined with it. The whole situation constitutes a general equilibrium through which various interests are balanced. This case study thus paints a far more complicated picture of the law's impact on people's behavior than usually assumed. Instrumental concerns, or coercive action and sanctions alone, do not adequately explain people's interaction with the law in a “lawless” circumstance; a whole range of instrumental concerns must be considered, and they, together with sanctions, must be understood in the context of a larger institutional environment in which the interactions of various players unfold.