"Three Essays on Agrarian Contracts.".

Cornell University. Outstanding Ph.D. Dissertation Award.

This dissertation presents three essays on agrarian contracts. In the first essay, I broaden the theory of share tenancy by developing two original models to account for the emergence of reverse share tenancy contracts, that is, sharecropping contracts between a poor landlord and a rich tenant. The first model explains reverse share tenancy as a result of asset risk, while the second model explains reverse share tenancy as a result of price risk. I also present a third, extant model of limited liability that could also explain the emergence of reverse share tenancy.

In the second essay, I take the models developed in the first essay to field data from Lac Alaotra, Madagascar. I develop a discrete choice empirical framework that allows me to test between theories of reverse share tenancy by considering first the decision to lease out versus the decision to exploit one's own plot of land, and then the choice between a fixed rent or a sharecropping contract, conditional on having first chosen to lease out. After controlling for plot, landlord, and tenant characteristics, I find that while the asset risk and limited liability explanations explain the emergence of sharecropping in Lac Alaotra, the asset risk, price risk, and limited liability explanations all account for the emergence of reverse share tenancy.

In the third essay, I study the effects of monitoring in contracts between an exporting firm and agricultural producers in Madagascar. Using a principal-agent framework that incorporates both moral hazard and adverse selection, I derive testable implication about the shape of the contracts. I then develop an empirical framework that first allows me to estimate the level of technical inefficiency of each agent, given the nature of the data, and then to control for adverse selection in testing for the effect of monitoring. I find that monitoring has no statistically significant effect at the margin, but that it has an economically significant negative effect on yield, in the sense that it decreases the average agent's yield. Rather than constitute a rejection of incentive theory, this seems to indicate a specification error or an endogeneity problem with the monitoring variable in the contracted crop production function that my instrumenting strategy unfortunately cannot overcome.