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Journal ArticleDOI

Behavioral and Material Determinants of Production Relations in Land-Abundant Tropical Agriculture

01 Oct 1987-Economic Development and Cultural Change (University of Chicago Press)-Vol. 36, Iss: 1, pp 73-99
TL;DR: In this article, the major institutions and customary features of production relations in three agroclimatic subzones of the land-abundant tropics were analyzed in order to predict how these institutions and features will change in response to increases in population densities and the opening of substanceoriented systems via external migration and interregional or international trade.
Abstract: The objectives of this paper are (1) to explain, in an internally consistent manner, the major institutions and customary features of production relations in three agroclimatic subzones of the land-abundant tropics that have simple technology and high transport costs and (2) to provide predictions of how these institutions and features will change in response to increases in population densities and the opening of substance-oriented systems via external migration and interregional or international trade. Production relations are the relations of people to products and factors of production in terms of their rights of ownership and use and the corresponding relationships of people among each other as buyers and sellers, as factor owners and renters, as landlords, tenants, workers, employers, creditors, and debtors. The peculiar institutional and customary features of land-abundant areas that we want to explain in an internally consistent manner include the absence of regular output and labor markets; the nonexistence of a landless labor class; the minimal nature of credit markets and the absence of professional money lenders; the importance of livestock wealth as an insurance substitute in semiarid zones; the existence of livestock tenancy but the absence of tenancy in land; the existence and the insurance function performed by extended families; and the cultivation by extended families of plots in common in some regions but not in others. We also want to be able to predict the changes in these institutions and features that arise when population density grows and/ or when the economy is exposed to external markets.
Citations
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Journal ArticleDOI
TL;DR: In this paper, a model of peasant household behavior under varying degrees of household-specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives, presumed specific to peasants.
Abstract: A model of peasant household behavior, under varying degrees of household-specific food and labor market failures, is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives, presumed specific to peasants. The model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities; the key role of manufactured consumer goods prices in stimulating peasants' effort in cash crops production; the effectiveness of taxation as opposed to incentives in stimulating cash crops production; and the key role of technological change in food production to enhance cash crop production. Results are obtained analytically in the case of one market failure and by numerical simulation with more than one.

1,565 citations

Journal ArticleDOI
TL;DR: This article found that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men, implying that about 6 percent of the household's output is lost due to inefficient factor allocation.
Abstract: Virtually all models of the household assume that the allocation of resources is Pareto efficient. Within many African households, agricultural production occurs on many plots controlled by different members of the household. Pareto efficiency implies that factors should be allocated efficiently across these plots. I find, in contrast, that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men. The estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household. The paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results.

1,257 citations


Cites background from "Behavioral and Material Determinant..."

  • ...The absence of these markets is related to the historical abundance of land (Binswanger and McIntire, 1987)....

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  • ...Binswanger and McIntire (1987) and Collier (1983) argue that moral hazard has inhibited the development of rural labor markets in much of Africa....

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01 Jan 2003
TL;DR: In this paper, the authors review and interpret the aggregate-level and microeconomic literatures to identify the key explanations for Africa's slow growth and a massive exodus of capital, pointing to four factors as being important: lack of openness to international trade, high risk environment, low level of social capital, and poor infrastructure.
Abstract: Africa has had slow growth and a massive exodus of capital. In many respects it has been the most capital-hostile region. We review and interpret the aggregate-level and microeconomic literatures to identify the key explanations for this performance. There is a reasonable correspondence of the two sets of evidence, pointing to four factors as being important. These are a lack of openness to international trade; a high-risk environment; a low level of social capital; and poor infrastructure. These problems are to a substantial extent attributable to government behavior, and the paper includes a review of the political economy literature addressing that behavior.

1,248 citations

Journal ArticleDOI
TL;DR: In this paper, a review of the literature on poor households' use of risk management and risk-coping strategies is presented, which identifies the constraints on their effectiveness and discusses policy options.
Abstract: Poor rural and urban households in developing countries face substantial risks, which they handle with risk-management and risk-coping strategies, including self-insurance through savings and informal insurance mechanisms. Despite these mechanisms, however, vulnerability to poverty linked to risk remains high. This article reviews the literature on poor households’ use of risk-management and risk-coping strategies. It identifies the constraints on their effectiveness and discusses policy options. It shows that risk and lumpiness limit the opportunities to use assets as insurance, that entry constraints limit the usefulness of income diversification, and that informal risk-sharing provides only limited protection, leaving some of the poor exposed to very severe negative shocks. Public safety nets are likely to be beneficial, but their impact is sometimes limited, and they may have negative externalities on households that are not covered. Collecting more information on households’ vulnerability to poverty through both quantitative and qualitative methods can help inform policy.

1,193 citations


Cites background from "Behavioral and Material Determinant..."

  • ...Other studies also suggested imperfect risk-sharing or consumption smoothing (Chaudhuri and Paxson 1994; Deaton 1991, 1992, 1997; Morduch 2002; Paxson 1993). The experiences during the famines in the Horn of Africa in the mid-1980s also illustrate the limitations of these coping strategies. Despite complex coping strategies, as documented by Rahmato (1991), the effects of the famines were severe....

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  • ...8 common strategy to cope with income fluctuations in many rural areas (Binswanger and McIntire 1987, Davies 1996)....

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  • ...For example, buying and selling cattle is generally recognized as a common strategy for coping with income fluctuations in many rural areas (Binswanger and McIntire 1987; Davies 1996). But a large proportion of households often do not own livestock. Dercon (1998) finds that only half the households in a sample in western Tanzania own cattle, even though cattle are important in the farming system and the culture....

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Journal ArticleDOI
TL;DR: This article reviewed and interpreted the aggregate-level and microeconomic literatures to identify the key explanations for Africa's slow growth and a massive exodus of capital, pointing to four factors as being important: a lack of openness to international trade; a high risk environment; a low level of social capital; and poor infrastructure.
Abstract: Africa has had slow growth and a massive exodus of capital In many respects it has been the most capital-hostile region We review and interpret the aggregate-level and microeconomic literatures to identify the key explanations for this performance There is a reasonable correspondence of the two sets of evidence, pointing to four factors as being important These are a lack of openness to international trade; a high-risk environment; a low level of social capital; and poor infrastructure These problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

1,100 citations


Cites background from "Behavioral and Material Determinant..."

  • ...Under semi-arid conditions with few investment opportunities and consequent low population density, agriculture will take the form of autarky (production for own consumption) without a market for permanent labour (Binswanger and McIntire, 1987)....

    [...]

References
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Journal ArticleDOI
TL;DR: In this paper, the authors developed a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas, incorporating general considerations of risk and information constraints jointly with the principal material attributes of agriculture and agricultural production factors.
Abstract: In this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas. The analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors. The framework is used to analyse barriers to the existence of the major intertemporal and factor markets. It is applied specifically to land‐scarce environments for which it provides an internally consistent explanation for many of the well‐documented institutional features of such settings. In addition, the analysis provides new implications for, among other phenomena, the inter‐relationships among ownership holdings, operational scale, family size and factor productivity; for the scarcity of animal rental markets and use of animals as collateral; for the renting out of land by small landowners; and for the existence of plantations for certain crops.

891 citations


"Behavioral and Material Determinant..." refers background or methods in this paper

  • ...Young adults will only be able to break away from their vertically extended households once they have accumulated sufficient capital for (1) a wage fund (i....

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  • ...We define two forms of extension: (1) a vertically extended household, composed of nuclear units of succeeding generations, and (2) a horizontally extended household, composed of nuclear units of sib-...

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  • ...The absence of a sales value for land under low population density has several profound implications: (1) As no major productive asset exists with high collateral value, credit supply is sharply limited from...

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  • ...growth has eight principal effects: (1) it reduces the fallow period; (2) it increases investment in land; (3) it encourages the shift from hand hoe cultivation to animal traction; (4) it encourages soil fertility maintenance via manuring; (5) it reduces the average cost of infrastructure; (6) it permits more specialization in production activities; (7) it induces a change from general to specific land rights; and (8) it reduces the per capita availability of common property resources (forest, bush and/or grass fallows, communal pastures)....

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  • ...Widespread use of hired labor in the land-abundant tropics (LAT) occurs primarily in two circumstances: (1) temporary migrants can be hired from a nearby agroclimatic region with a different sowing period, or (2) annual migrants can be hired from a poorer agroclimatic region....

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Posted Content
TL;DR: In this article, a new empirical study of the relation between money, nominal income, prices, and real output in postwar quarterly U.S. data rejects virtually all of the conclusions reached by Families provide individuals with risk sharing opportunities which may not otherwise be available.
Abstract: A new empirical study of the relation between money, nominal income, prices, and real output in postwar quarterly U.S. data rejects virtually all of the conclusions reached by Families provide individuals with risk sharing opportunities which may not otherwise be available. Within the family there is a degree of trust and a level of information which alleviates three key problems in the provision of insurance by markets open to the general public, namely, moral hazard, adverse selection, and deception. The informational advantages of pooling risk within families must be set against the inability of families to provide complete insurance because of the small size of the risk pooling group. This paper demonstrates how families can provide insurance against uncertain dates of death. Death risk sharing family arrangements effectively constitute an incomplete annuities market. Our analysis indicates that these arrangements even in small families can substitute by more than70% for complete annuities. Given the adverse selection problem and transactions costs in public annuity markets, risk pooling in families may well be preferred to purchasing market annuities. In the absence of organized public markets in annuities, these risk sharing arrangements provide powerful economic incentives for marriage and family formation. The paper suggests that inter-family transfers need have nothing to do with altruistic feelings; rather, they may simply reflect risk sharing behavior of completely selfish family members.(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of thi(This abstract was borrowed from another version of this item.)

705 citations

ReportDOI
TL;DR: In the absence of public annuities, these risk-sharing arrangements provide powerful incentives for marriage and family formation as discussed by the authors, and they can substitute by more than 70 percent for perfect market annuity markets.
Abstract: Families can self-insure against uncertain dates of death through implicit or explicit agreements with respect to consumption and interfamily transfers. Interfamily transfers need have nothing to do with altruistic feelings; they may simply reflect risk-sharing behavior of completely selfish family members. Although family annuity markets are incomplete, even small families can substitute by more than 70 percent for perfect market annuities. Given adverse selection and transaction costs, family risk pooling may be preferred to public market annuities. In the absence of public annuities, these risk-sharing arrangements provide powerful incentives for marriage and family formation.

592 citations