August 21, 2014

Markets in Some Things: Professional Protestors in China

Given the Chinese legal system's general dysfunction, it's not a surprise that medical malpractice lawsuits are not very common. What is surprising is the alternative that has come about, according to this New Yorker article on Chinese patients attacking doctors:

In Beijing, I met Benjamin Liebman, a professor at Columbia Law School, who has published a study on “malpractice mobs” in China. He told me that protests consistently extract more money from hospitals than legal proceedings do. Family members can even hire professional protesters. One report in Shenzhen mentioned an average price of fifty yuan a day for the service of a protester. The radiologist in Shanghai told me, “If your mother dies in the hospital, there will be an agency that comes to you and says, ‘We can help you. We can have twenty guys who can come to the hospital, blackmail them, and share fifty per cent of the profits.’ They’re very professional.”
Surprisingly, in a country where even a small public gathering can spark a government response, malpractice mobs often proceed without intervention. It’s possible that the authorities see them as justified or simply as an efficient method for negotiating compensation. Some scholars even argue that the Chinese government tacitly welcomes such protests, considering them to be a relatively harmless outlet for discontent and an early-warning signal of more serious social unrest—a phenomenon that the Berkeley political scientist Peter Lorentzen, in a study of authoritarian regimes, has called “regularizing rioting.” Liebman told me, “Protest becomes the mechanism for providing social security and for distinguishing people who need help.” The problem is, he said, “everyone knows the government has funds to pay people who petition or protest, and that incentivizes more protest.”
The rest of the article is an interesting read as well, but it's both a little weird and a little interesting to see this economic alternative to the courts appear.

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