Work Incentives In a Model of Collective With and Without Universal Membership
In this paper we focus on the role of expulsion by a collective to explain the agricultural performance in China during the post-1958 period. We model the collective as having access to a costly and imperfect monitoring technology whereby it can punish members if caught shirking either through expulsion or through a reduction in pay We show that under plausible assumptions about tastes and technology, the threat of expulsion generates greater incentives for both the collective and members to monitor and provide higher effort, respectively. Our model contrasts with the exit right hypothesis advanced by Lin (1990) where the credibility of exit threat is debatable. The threat of expulsion in our model constitutes not only a credible threat but also generates a richer set of equilibrium outcomes which better suit the reality of Chinese collectives.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stiglitz, Joseph E & Weiss, Andrew, 1983. "Incentive Effects of Terminations: Applications to the Credit and Labor Markets," American Economic Review, American Economic Association, vol. 73(5), pages 912-27, December.
- Liu Minquan, 1993. "Exit Right, Retaliatory Shirking, and the Agricultural Crisis in China," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 540-559, June.
- Bonin John P. & Putterman Louis, 1993. "Incentives and Monitoring in Cooperatives with Labor-Proportionate Sharing Schemes," Journal of Comparative Economics, Elsevier, vol. 17(3), pages 663-686, September.
- Kung James Kaising, 1993. "Transaction Costs and Peasants' Choice of Institutions: Did the Right to Exit Really Solve the Free Rider Problem in Chinese Collective Agriculture?," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 485-503, June.
- Dong Xiao-yuan & Dow Gregory K., 1993. "Does Free Exit Reduce Shirking in Production Teams?," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 472-484, June.
- Lin Justin Yifu, 1993. "Exit Rights, Exit Costs, and Shirking in Agricultural Cooperatives: A Reply," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 504-520, June.
When requesting a correction, please mention this item's handle: RePEc:yor:yorken:99/35. 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: (Paul Hodgson)
If references are entirely missing, you can add them using this form.