Description
Reiterating why formal contracts have not gained much ground in China, Boisot and Child, (1996) and Child et al (2003), counter that social institutions, which have governed exchange in China through norms and obligations for thousands of years, impede a reliance on the development of, and the use of formal institutions such as legal system and contract law with their efficiency-based logic for coordinating exchange. They express surprise that the use of contract is still prevalent in China despite the impacts of norms and obligations.