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on Central and Western Asia |
| By: | Arindam Das-Gupta (Indira Gandhi Institute of Development Research, Goregaon, India); Shanto Ghosh (LECG, Oakland); Dilip Mookherjee (Institute for Economic Development, Boston University) |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-137&r=cwa |
| By: | Raghabendra Chattopadhyay (Indian Institute of Management, Calcutta); Esther Duflo (Department of Economics, MIT) |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-114&r=cwa |
| By: | Sanghamitra Das (Indian Statistical Institute, Delhi); Dilip Mookherjee (Institute for Economic Development, Boston University) |
| Abstract: | This paper explores the role of differing contractual relationships between sugarcane farmers and sugar factories in India resulting from differing ownership structures. In Maharashtra most sugar factories are cooperatively owned by cane farmers, while in Uttar Pradesh most factories are privately owned and purchase cane from independent peasant farmers. The key incentive problem is that residual claimants to factory profits are inclined to exploit their monopsony power and underprice cane supplied by farmers. This results in undersupply of cane to factories, the extent of which depends on who owns the factory, besides the distribution of land between small and big growers. Predictions of the model are empirically verified from panel data spanning 1982–95 for private and coop factories in the two states. We find that the respective cane price distortions overwhelm the effect of changes in cane quality, technological change, prices or irrigation in accounting for differences in growth of the industry between different ownership forms and regions over this period. |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-139&r=cwa |
| By: | Sujata Visaria (Institute for Economic Development, Boston University); |
| Abstract: | This paper investigates the micro-level link between judicial quality and eco- nomic outcomes. It uses a loan-level data set from a large Indian bank to es- timate the impact of a new quasi-legal institution, Debt Recovery Tribunals, which are aimed at accelerating banks' recovery of non-performing loans. I use a dfferences-in-dfferences strategy based on two sources of variation: the mon- etary threshold for claims to be eligible for these tribunals, and the staggered introduction of tribunals across Indian states. I find that the establishment of tribunals reduces delinquency in loan repayment by between 3 and 11 percent. The ffect is statistically significant within loans as well: for the same loan, in- stallments that become due after the loan becomes treated are more likely to be paid up on time than those that become due before. Furthermore, interest rates on loans sanctioned after the reform are lower by 1.4-2 percentage points. These results suggest that legal reform and the improved enforcement of loan contracts can reduce borrower delinquency, and can lead banks to provide cheaper credit. Thus the paper illustrates a microeconomic mechanism through which improve- ments in legal institutions might affect credit market outcomes. |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-157&r=cwa |