A theory of ambiguous property rights in transition economies: the case of the Chinese non-state sector

A theory is developed on ambiguous property rights in which property owners have to contest the actual control right in all situations. The highly successful non-state sector of China is a prime example of ambiguous property rights, which arise because of a market environment that is imperfect. It was suggested that in China's undeveloped market environment, ambiguous property rights are more efficient than clearly defined private property rights.