The Informal Institution of Guanxixue in China

By Margot Marston

In their study of informal institutions, Helmke and Levitsky (2004) explain the emergence of blat in the USSR which is often compared to a similar practice in China: guanxi. Both highly flexible idioms are defined as the use of personal networks for getting things done. Guanxi and blat are similar in their re-distributive functions in a state centralised economy, co-dependency with the condition of the shortage and ambiguity between social and instrumental use of the networks (Ledeneva 2003).

Guanxi, like blat proliferated under a communist/state-centralised systems as an accommodating informal institution. It created incentives for behaviour to alter the substantive affects of formal rules, contradicting the spirit, but not the letter of the law (Helmke & Levitsky, 2004).  However the tradition of guanxi, unlike blat, has a longer history. Guanxi can be traced back to Confucianism and carries with it a moral force of reciprocity and codifies the relationship and strengthens trust, kinship and social harmony. The observance of social form, loyalty, and emotional feelings carry further ethical dimensions associated with guanxi that have laid down the foundation for its persistence in the new consumer economy and are tied to a deeper sense of Chinese culture. 

However, guanxi’s recent shift into corruption has halted the universality of its beneficiaries flourishing in the nexus of the public and private, maintaining an inner circle of political and business elite as its primary beneficiaries.  This marked shift of the informal institution under market conditions has had harmful effects, as the highest social class has quietly accumulated public wealth and has subverted an institution that was initially aimed at compensating for formal order and aided in the manufacturing mutual exchange and manoeuvring through difficult circumstance in the Maoist era and 1980s. Trust and social capital in China carries great weight in the functioning of the Chinese economy, yet have also created an exploitative dimension of corruptive behaviour that brings into question whether guanxi has become a competing rather than accommodating informal institution.

Helmke, Gretchen, and Steven Levitsky. "Informal institutions and comparative politics: A research agenda." Perspectives on politics 2.04 (2004): 725-740.

Ledeneva, A. (2008). Blat and Guanxi: Informal Practices in Russia and China. Comparative Studies in Society and History, 50(1).