Decentralized and Anomalous Interpretation of Chinese Private Law : Understanding a Bureaucratic and Political Judicial System

China developed without clear entitlements, creating the China Puzzle for law and development theorists. But fundamental statutes regarding contract, torts, and property have been enacted by now. Will clear delineation of private rights drive China's future development? The answer largely depends on how the nationally promulgated statutes are interpreted by local Chinese courts. If Chinese judges interpret statutes in a predictable and market-friendly way, they add fuel to economic development. But have they? Will they? This article proposes a positive theory to describe the bureaucratic and political nature of Chinese courts. Chinese courts occasionally—sometimes systemically—render doctrinally unconvincing decisions because judges are bureaucrats, whereas court presidents are politicians. Facing local socio-political pressure, courts are ready to make idiosyncratic statutory interpretations, because resolving disputes in and out of courts, legally or ultra-legally, is more important than interpreting statutes correctly. China's Supreme People's Court is unable to correct locally sensible yet nationally problematic decisions because most private-law cases cannot be appealed to the highest court due to jurisdictional rules. Even when the Supreme People's Court has opportunities to redress conflicting interpretations, it is often too cautious to take a position. This article not only reviews existing research regarding our theory but also conducts one of the very first large-scale empirical studies of lower court decisions in China. The finding is that Chinese courts not infrequently deviate from standard statutory interpretations, often inexplicably. Entitlements can be re-shaped by courts due to political influences