Institutional barriers and governance evolution in the cross-administrative market-based allocation of water rights: an analysis based on the quasi-marketperspective

The allocation of water rights in China is characterized by the coexistence of administrative-led and market-based approaches. Cross-administrativewater rights trading faces challenges in its institutional environment, property rights definition, transaction costs, and coordination mechanisms. From the perspective of the quasi-market theory, this paper constructs an environment-property rights-transaction costs-coordination (EPTC) framework to analyze the institutional logic behind the conflicts between administrative-led and market-based approaches in cross-administrative water rights allocation. The findings indicate that China's water rights market does not represent a transitional phase towards a free market but rather a sustainable institutional form that effectively integrates an efficient market with an active government. The inherent tension between state ownership and market-based allocation results in the administrative definition of property rights, compounded transaction costs, and inefficient coordination mechanisms, collectively giving rise to an institutional lock-in effect. Major river basins, including the Yellow River, Yangtze River, and Haihe River, demonstrate divergent pathways in rights confirmation methods, transaction models, and compensation mechanisms. Based on a comparative analysis of typical cases and major basins, this paper proposes systematically advancing differentiated reforms in legal safeguards, rights confirmation systems, trading platforms, and coordination authority, aiming to clarify the functional boundaries between administrative allocation and market regulation and establish a water rights governance system aligned with quasi-market characteristics.