The Theory of Non-Market Contracts in Foot Binding

Abstract This paper reinterprets the rise and demise of foot binding in ancient China from the perspective of transaction cost and contract theory, highlighting that foot binding emerged as a form of non-market contract. Since individual property rights among female family members in extended families cannot be clearly defined before separation, they compete with each other through non-price criteria, specifically foot binding, to lower information and supervision costs when defining property rights in the future. In this process, foot binding has become a contractual arrangement that constrained competition between wives and concubines, helping family members maintain a relatively stable distribution of internal rights. However, as the ancient Chinese family system disintegrated and the costs of information and supervision declined, the practice of foot binding gradually set on a path of decline and eventual disappearance. Furthermore, this paper not only exposes the shortcomings of game theory and new institutional economics through the development of a non-market contract theory but also critiques existing research that merely views footbinding as a sociocultural or labor phenomenon by reviewing relevant literature and historical data.