Debates over tenure insecurity have been divided between those favoring private, marketable, and formalized
property rights versus champions of grassroots’ customary and communal arrangements. By
positing the “credibility thesis”, this article argues that it might be more insightful to move beyond
concepts of formal and informal, private and common, or secure and insecure institutions, to leave the
discussion about institutional form for a discussion about function. The notion of credibility does so by
drawing attention to institutional function over time and space rather than to a desired form postulated
by theory or political conviction. Apart from furthering the theoretical foundations on credibility and
institutional functionalism, this article aims to develop its methodology and empirical study by taking
China as a case study, with particular reference to its rural land-lease system, which is perceived to be
highly insecure due to forced evictions and government intervention. Paradoxically, the study finds significant
social support for the rural land-lease system and a low level of conflict. These findings might
indicate that the form of the Chinese rural lease system (insecure tenure) is the outcome of its present
function (provision of social welfare). Simultaneously, it was also found that when conflict does occur
expropriation is a prime cause for it.