Impediments to contract enforcement in day labour markets: a perspective from India

Naraparaju, Karthikeya

doi:10.1017/s1744137415000442

Cited by 4 publications

(4 citation statements)

References 19 publications

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“…Demand for alternative dispute resolution mechanisms may arise when time delay and costs to litigation are prevalent in publicly provided courts (Marselli et al , 2015). A robust literature has evaluated informal governance in contracting (Jain and Sood, 2016; Naraparaju, 2016). As another example, there is a long tradition in development economics arguing for strong contract enforcement mechanisms as a primary vehicle of growth (Clague et al , 1999).…”

Section: Introductionmentioning

confidence: 99%

Contracts and trust: complements or substitutes?

McCannon

Asaad

Wilson

2017

Journal of Institutional Economics

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Social preferences and third-party enforcement of formal contracts are two mechanisms that facilitate performance of an agreement. The standard argument is that formal, enforceable contracts substitute when the social preferences of trust and trustworthiness are lacking. We explore the alternative hypothesis that trust and contract enforcement are complements. We measure social preferences from both a Trust Game and a social values survey, using them as explanatory variables in a Contract Game. We find that both increased contract enforcement and high trusting preferences lead to enhanced rates of contract formation and larger investments. There is an important interaction effect, where trusting individuals enter into agreements at a greater rate and make larger investments when enforcement is greater. Thus, contracts and trust complement one another.

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Section: Introductionmentioning

confidence: 99%

Contracts and trust: complements or substitutes?

McCannon

Asaad

Wilson

2017

Journal of Institutional Economics

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“…Informal labor contract enforcement often takes place through social networks that have been developed over time (Naraparaju ). That is why workers prefer to be recruited by sardars from their own region.…”

Section: The Source Of Mafia Powermentioning

confidence: 99%

“…Yet, even sardars had limited control over workers. Around one‐quarter of the labor they recruited would disappear in the first week of employment (Naraparaju : 24). To reduce these losses and gain greater control over the labor force, sardars eventually recognized the need to bring miners from the regions they themselves came from, enabling them to command and supervise their “own people” who were indebted to sardars for their jobs.…”

Section: The Source Of Mafia Powermentioning

confidence: 99%

The Coal Mine Mafia of India: A Mirror of Corporate Power

Goyal¹

2018

American J Econ Sociol

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An investigation of the source of power of mafia-type organizations may reveal how other non-state actors can operate as if they are independent of the state. This study of the coal mafia in Dhanbad, India shows that power often derives from socially hierarchical relationships involving debt and/or caste. It also demonstrates how state policies that are thoughtlessly implemented may solidify existing hierarchies. By analogy, modern corporations gain some of their power by behaving as if they were semi-sovereign institutions that draw their strength informally from social networks and other extralegal relationships.The mafia in the Dhanbad coalfields emerged through a series of institutional changes. Labor shortages were initially resolved by labor intermediaries, who eventually controlled the labor through linkages associated with debt, caste, and social obligations. These intermediaries eventually assumed official positions in labor unions, which gave them a platform for electoral politics. When the coal industry was nationalized, the union leaders further solidified their position in the nationalized corporation. In this way, private labor intermediaries became local political leaders who controlled the state apparatus to some extent.Corporations follow similar patterns. Both mafias and corporations exploit weak governments, collude with them, and often operate with a high degree of independence. Like mafias, corporations often derive their power from socially embedded networks that they craft in local communities and populations. Because the roots of their influence are embedded in social networks, simple legal and regulatory changes are often insufficient to limit their power. Transnational corporations engaged in extraction of natural resources share with mafias the ability

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“…The complexity in quantifying transaction costs and key characteristics of the institutional environment is arguably one of the main reasons for this. Rare examples include Oxley (1999), which explores the impact of property rights regimes on the choice of governance structure for new technology international transfers; Roe (2005), which shows that the legal regime affects the institutions of corporate governance; and Naraparaju (2016), which discusses hazards of opportunistic behaviour for a day worker in an unregulated environment in India.…”

Section: Introductionmentioning

confidence: 99%

The institutional environment and gig platform transaction cost solutions

Golovanova,

Pontual Ribeiro,

Styrin

et al. 2024

Journal of Institutional Economics

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A growing number of labour market participants transact through gig platforms. This choice should reflect a reduction in transaction costs for platform users, compared to costs they meet when using alternative modes of governance. We exploit a unique cross-platform, cross-country data set of gig platform users to test the impact of the institutional environment in one of its dimensions – the strictness of labour market regulation (LMR) – on the ability of gig platforms to reduce users' transaction costs. According to our findings, the regulation indicator of both the user and platform countries influences transaction costs for platform users, even controlling for platform and user characteristics. The platform appears to reduce transaction costs most when users face stricter or weaker LMR, in a U-shaped effect. In the former case, the platform may provide an escape from labour regulations when hiring for tasks, while in the latter case, the platform can economize on the usual transaction costs of private contracting by administrating some types of users' activities.

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Impediments to contract enforcement in day labour markets: a perspective from India

Cited by 4 publications

References 19 publications

Contracts and trust: complements or substitutes?

Contracts and trust: complements or substitutes?

The Coal Mine Mafia of India: A Mirror of Corporate Power

The institutional environment and gig platform transaction cost solutions

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