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Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity

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  • Hagos, Hosaena Gebru
  • Holden, Stein T.

Abstract

While there are ample empirical studies that claim the potential disincentive effects of sharecropping arrangements, the existing literature is shallow in explaining why share tenancy contracts are prevalent and diffusing in many developing countries. Using a unique tenant-landlord matched dataset from the Tigray region of Ethiopia, we are able to show how the tenants’ strategic response to the varying economic and tenure-security status of the landlords can explain sharecroppers’ productivity differentials.

Suggested Citation

  • Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1270
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    References listed on IDEAS

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    1. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364, January.
    2. Joseph E. Stiglitz, 1974. "Incentives and Risk Sharing in Sharecropping," Review of Economic Studies, Oxford University Press, vol. 41(2), pages 219-255.
    3. Bezabih, Mintewab & Holden, Stein, 2010. "The Role of Land Certification in Reducing Gender Gaps in Productivity in Rural Ethiopia," Discussion Papers dp-10-23-efd, Resources For the Future.
    4. Stein T. Holden & Klaus Deininger & Hosaena Ghebru, 2007. "Impacts of Low-Cost Land Certification on Investment and Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 359-373.
    5. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October.
    6. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    7. Deininger, Klaus & Ali, Daniel Ayalew & Holden, Stein & Zevenbergen, Jaap, 2008. "Rural Land Certification in Ethiopia: Process, Initial Impact, and Implications for Other African Countries," World Development, Elsevier, vol. 36(10), pages 1786-1812, October.
    8. Arcand, Jean-Louis & Ai, Chunrong & Ethier, Francois, 2007. "Moral hazard and Marshallian inefficiency: Evidence from Tunisia," Journal of Development Economics, Elsevier, pages 411-445.
    9. Menale Kassie & Stein Holden, 2007. "Sharecropping efficiency in Ethiopia: threats of eviction and kinship," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 179-188, September.
    10. Stein Holden & Bekele Shiferaw & John Pender, 2001. "Market Imperfections and Land Productivity in the Ethiopian Highlands," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(3), pages 53-70.
    11. Macours, Karen, 2014. "Ethnic divisions, contract choice, and search costs in the Guatemalan land rental market," Journal of Comparative Economics, Elsevier, pages 1-18.
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    13. Bellemare, Marc F., 2010. "Insecure Land Rights and Share Tenancy in Madagascar," MPRA Paper 23640, University Library of Munich, Germany.
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    17. Holden, Stein T. & Ghebru, Hosaena, 2011. "Household Welfare Effects of Low-cost Land Certification in Ethiopia," CLTS Working Papers 3/11, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    18. Gavian, Sarah & Ehui, Simeon, 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics, Blackwell, vol. 20(1), pages 37-49, January.
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    21. Stein Holden & Klaus Deininger & Hosaena Ghebru, 2011. "Tenure Insecurity, Gender, Low-cost Land Certification and Land Rental Market Participation in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 47(1), pages 31-47.
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    Keywords

    Marshallian inefficiency; kinship; Matching method; Tenure; tenant; Share cropping; Land tenure; Land ownership; Agricultural productivity; Smallholders;

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