How Polycentric Governance Shapes Rural Operation: Evidence from Huashu Village in Nanjing, China

The diversification of rural development actors in China has promoted a shift from state-centered governance toward collaborative approaches, with rural operation emerging as an important pathway for resource mobilization and value creation. While existing studies have examined multi-actor participation, less attention has been paid to the institutional and socio-economic mechanisms through which polycentric governance shapes rural operation, particularly regarding market rationalities, contractual arrangements, and local capacity formation. This study develops an analytical framework conceptualizing rural polycentric governance as the interaction of institutional support, market embedding, and local agency, and examines rural operation transformation through changes in actors, rights relations, and industrial structures. Drawing on a case study of Huashu Village in Nanjing, this study explores how polycentric governance reshapes rural operation over time. The findings reveal a transition from traditional collective operation to government-led project-based operation, and ultimately to market-embedded polycentric collaborative operation. Specifically, institutional support, through property-rights reforms, policy incentives, and normative arrangements, provides foundations for multi-actor collaboration. Market embedding, through external capital, market-oriented management rationalities, and contractual norms, reshapes resource allocation and cooperative relationships. Local agency, through grassroots organization building, local resource activation, and actor capacity development, transforms external resources into endogenous development capabilities. Through continuous interaction and feedback, these dimensions jointly promote diversified actors, clarified rights arrangements, and integrated industrial development. This study expands the theoretical boundaries of rural polycentric governance by incorporating implicit governance dimensions, refining theoretical explanations of how polycentric governance enables rural operation, and providing empirical evidence on its complexity and dynamics for policy formulation.