Post-disaster reconfiguration of property rights in a transition economy

This article draws on the ongoing reconstruction in Wenchuan earthquake areas and studies how a new world of private property rights affects post-disaster reconstruction. In addition to analysing particular problems related to rural housing, urban housing and housing finance, I argue that (1) more decentralised reconstruction planning might be needed for rural housing reconstruction, which is decentralised by nature; (2) the homeowners association may not be an efficient vehicle for urban housing reconstruction; (3) writing off all remaining mortgage balances is not fair to everybody. I also discuss three general themes related to post-disaster property rights. First, post-disaster reconfiguration may be an important opportunity for major change in the property rights regime, including the decline of informal or communal property rights. Second, the reconstruction approach is path-dependent and the trade-off between liability rules and property rules depends critically on how eminent domain is executed. Third, the well known 'safe development paradox' may also have a property rights dimension.