Incomplete Contracts and Investment : A Study of Land Tenancy in Pakistan

Jacoby, Hanan G. ; Mansuri, Ghazala

World Bank, Washington, DC

关键词: ADVERSE SELECTION;    AGRICULTURAL LAND;    AGRICULTURE;    ASYMMETRIC INFORMATION;    CONTRACT THEORY;   

DOI  :  10.1596/1813-9450-3826
RP-ID  :  WPS3826

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

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.