The Emergence of Informal Institutions among Internal Migrants in Urban China

Abstract

China’s dramatic economic development and urbanisation have led to an increase in its number of internal migrants. As of 2013, this group accounted for more than 20 per cent of the country’s population, and approximately 70 per cent of people in this group are working in the informal economy. This paper pays special attention to migrant-traders in the informal sector and the strategies they use in Shanghai. Migrants are doubly marginalised by the hukou (户口) and danwei (单位) systems in the megacity and have only limited access to social welfare. It is argued that the informal strategies of these marginalised actors develop in related patterns of social relationships and institutional constraints. Such strategies create new forms of informal institutions that are justified and gain legitimacy when countering unequal and hierarchical formal institutions and social arrangements. This paper empirically explores how informal institutions can act in parallel with or diverge from formal institutions, and how they might influence formal institutions in the long term.