An institutional analysis of the evolution of inland waterway transport and inland ports on the Pearl River

Inland waterway transport (IWT) is the most appropriate means of transportation in the pursuit of a sustainable development strategy. The development of IWT varies per region. Public entities and institutions play an important role in the development of IWT. This paper analyses the development of IWT on the Pearl River from an institutional perspective. Chinese national fiscal reforms, land use reforms and the transfer of power from the central government to local governments impact the governance of IWT. The paper demonstrates that the privatization of inland ports was triggered by the mismatch between the objectives of IWT operators and either public objectives or market demand. This process unfolded while top-level governors did not aim for privatization. The paper shows how formal institutional changes of IWT on the Pearl River are both the result of deliberate design and a path creation in the transformation from the Chinese planned economy to the Chinese market economy. It also shows how institutional changes resulted in a dual development path (i.e. a rapid development of inland terminals but underdevelopment of inland waterways) of IWT in the Pearl River. Policy recommendations are provided based on the research findings with specific attention to the factors hindering IWT development on the Pearl River at the level of the waterway infrastructure and inland ports.