IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id6332.html
   My bibliography  Save this paper

Impediments to Contract Enforcement in Day Labour Markets: A Perspective from India

Author

Listed:
  • Karthikeya Naraparaju

Abstract

This paper focuses on one such setting in India's urban informal economy: the 'day labour' market for casual labour. We survey seven such markets in Navi Mumbai (a city on the outskirts of Mumbai), and find considerable incidence of contract enforcement problems in the form of employers reneging on wage payments to labourers. It is found that payments to labourers with access to social networks and a record of work done are less likely to be reneged. Further, consistent with the literature on the limits of relation-based contract enforcement, it is found that labourers in large markets, with greater linguistic and caste-based diversity, are more likely to be reneged. It is argued that interventions aimed at facilitating access to formal mechanisms might help overcome some of the limitations with relation-based enforcement.

Suggested Citation

  • Karthikeya Naraparaju, 2014. "Impediments to Contract Enforcement in Day Labour Markets: A Perspective from India," Working Papers id:6332, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:6332
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=A20141212162820_20.pdf&fcategory=Articles&AId=6332&fref=repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John McMillan & Christopher Woodruff, 1999. "Interfirm Relationships and Informal Credit in Vietnam," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1285-1320.
    2. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    3. Jain, Tarun & Sood, Ashima, 2017. "How does relationship-based governance accommodate new entrants? Evidence from the cycle-rickshaw rental market," Journal of Institutional Economics, Cambridge University Press, vol. 13(3), pages 673-697, September.
    4. Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
    5. Fafchamps, Marcel, 1996. "The enforcement of commercial contracts in Ghana," World Development, Elsevier, vol. 24(3), pages 427-448, March.
    6. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jain, Tarun & Sood, Ashima, 2017. "How does relationship-based governance accommodate new entrants? Evidence from the cycle-rickshaw rental market," Journal of Institutional Economics, Cambridge University Press, vol. 13(3), pages 673-697, September.
    2. Beckmann, Volker & Boger, Silke, 2004. "Courts and contract enforcement in transition agriculture: theory and evidence from Poland," Agricultural Economics, Blackwell, vol. 31(2-3), pages 251-263, December.
    3. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Agricultural Transition - Theory And Evidence From Poland," 2003 Annual meeting, July 27-30, Montreal, Canada 22213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Lippert, Steffen & Spagnolo, Giancarlo, 2011. "Networks of relations and Word-of-Mouth Communication," Games and Economic Behavior, Elsevier, vol. 72(1), pages 202-217, May.
    5. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 595-619, December.
    6. Rohner, Dominic, 2011. "Reputation, group structure and social tensions," Journal of Development Economics, Elsevier, vol. 96(2), pages 188-199, November.
    7. Ernst Fehr & Tony Williams, 2017. "Social norms, endogenous sorting and the culture of cooperation," ECON - Working Papers 267, Department of Economics - University of Zurich, revised Apr 2018.
    8. Fainmesser, Itay P. & Goldberg, David A., 2018. "Cooperation in partly observable networked markets," Games and Economic Behavior, Elsevier, vol. 107(C), pages 220-237.
    9. Peter Leeson, 2007. "Efficient anarchy," Public Choice, Springer, vol. 130(1), pages 41-53, January.
    10. Fehr, Ernst & Williams, Tony, 2017. "Creating an Efficient Culture of Cooperation," IZA Discussion Papers 11131, Institute of Labor Economics (IZA).
    11. Fali Huang, 2006. "The Transition from Relational to Legal Contract Enforcement," Working Papers 23-2006, Singapore Management University, School of Economics.
    12. Choy, James, 2013. "A Theory of Cooperation through Social Division, with Evidence from Nepal," CAGE Online Working Paper Series 115, Competitive Advantage in the Global Economy (CAGE).
    13. Simon Johnson & John McMillan, 2002. "Courts and Relational Contracts," Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(1), pages 221-277, April.
    14. Leeson, Peter T., 2005. "Endogenizing fractionalization," Journal of Institutional Economics, Cambridge University Press, vol. 1(1), pages 75-98, June.
    15. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    16. Pyle, William, 2006. "Resolutions, recoveries and relationships: The evolution of payment disputes in Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 317-337, June.
    17. Sanchez-Pages Santiago & Straub Stéphane, 2010. "The Emergence of Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, September.
    18. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    19. Bohdan Kukharskyy & Michael Pflüger, 2011. "Relational Contracts and the Economic Well-Being of Nations," Working Papers 095, Bavarian Graduate Program in Economics (BGPE).
    20. Haucap, Justus, 2017. "The rule of law and the emergence of market exchange: A new institutional economic perspective," DICE Discussion Papers 276, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:6332. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.esocialsciences.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.