CMI Working Paper | 2006

The Effects on Agrarian Contracts of a Governmental Intervention into Bonded Labor in the Western Terai of Nepal

Magnus Hatlebakk (2006)
Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2006: 6) 40 p.

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Magnus Hatlebakk (2006). The Effects on Agrarian Contracts of a Governmental Intervention into Bonded Labor in the Western Terai of Nepal. Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2006: 6)

We study an effective intervention into a specific form of bonded labor. The intervention led to a shift in agrarian contracts, from bonded labor to sharecropping. By comparing the pre- and post-liberation contracts we evaluate theoretical models of agrarian contracts. We suggest three mechanisms that jointly explain why landlords offered bonded labor contracts pre-liberation. One mechanism we apply to define bonded labor in contrast to tied labor. The mechanism, where the outside option as casual labor is endogenously determined by the choice of long-term contract, implies a trade-off for the landlord between efficiency and redistribution of surplus.

Magnus Hatlebakk

Senior Researcher; Coordinator: Poverty Dynamics

Bonded Labor in Nepal

Dec 2004 - Dec 2006

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