Incentives, Supervision, and Sharecropper Productivity

30 Pages Posted: 20 Apr 2016

See all articles by Hanan G. Jacoby

Hanan G. Jacoby

World Bank - Agriculture and Rural Development Department; World Bank - Development Research Group (DECRG)

Ghazala Mansuri

World Bank - Development Research Group (DECRG)

Date Written: February 1, 2007

Abstract

Although sharecropping has long fascinated economists, the determinants of this contractual form are still poorly understood and the debate over the extent of moral hazard is far from settled. The authors address both issues by emphasizing the role of landlord supervision. When tenant effort is observable, but at a cost to the landlord, otherwise identical share-tenants can receive different levels of supervision and have different productivity. Unique data on monitoring frequency collected from share-tenants in rural Pakistan confirm that, controlling for selection, supervised tenants are significantly more productive than unsupervised ones. Landlords' decisions regarding the intensity of supervision and the type of incentive contract to offer depend importantly on the cost of supervising tenants.

Keywords: Contract Law, Economic Theory & Research, Investment and Investment Climate, Municipal Housing and Land, Urban Housing

Suggested Citation

Jacoby, Hanan G. and Mansuri, Ghazala, Incentives, Supervision, and Sharecropper Productivity (February 1, 2007). World Bank Policy Research Working Paper No. 4125, Available at SSRN: https://ssrn.com/abstract=960382

Hanan G. Jacoby (Contact Author)

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/hjacoby

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Ghazala Mansuri

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/gmansuri

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