Incomplete Contracts and Investment : A Study of Land Tenancy in Pakistan
No hay miniatura disponible
Fecha
Autores
Título de la revista
ISSN de la revista
Título del volumen
Editor
World Bank, Washington, DC
Resumen
Descripción
When contracts are incomplete, relationship-specific investments may be underprovided due to the threat of opportunistic expropriation or holdup. The authors find evidence of such underinvestment on tenanted land in rural Pakistan. Using data from households cultivating multiple plots under different tenure arrangements, they show that land-specific investment is lower on leased plots. This result is robust to the possible effects of asymmetric information in the leasing market. Greater tenure security also increases land-specific investment on leased plots. Moreover, variation in tenure security appears to be driven largely by heterogeneity across landlords, suggesting that reputation may be important in mitigating the holdup problem.
Palabras clave
ADVERSE SELECTION, AGRICULTURAL LAND, AGRICULTURE, ASYMMETRIC INFORMATION, CONTRACT THEORY, CONTRACTUAL ARRANGEMENTS, COST FUNCTIONS, CREDIT, DISCOUNT RATE, DISECONOMIES OF SCALE, EVICTION, EXPROPRIATION, HOUSEHOLDS, HUMAN CAPITAL, INCENTIVE EFFECTS, INCOMPLETE CONTRACTS, INEFFICIENCY, INVESTMENT BEHAVIOR, INVESTMENT INCENTIVES, LAND TENURE, LANDLORD, LANDLORDS, LANDOWNERS, LEASE, LEASING, LIABILITY, MAXIMUM LIKELIHOOD ESTIMATION, MORAL HAZARD, OPPORTUNITY COST, OPTIMAL CONTRACT, PRODUCTION EFFICIENCY, PRODUCTION FUNCTION, PROPERTY RIGHTS, RENTS, RETURN ON INVESTMENT, RISK, RISK AVERSION, RISK-NEUTRAL, STATEMENTS, TENANCY, TENANTS, WEALTH