A Theoretical Rationalization of the Institutional Change in Rice Harvesting : The Case of the Philippines

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In this article, I prove that, using a simple principal-agent model of implicit labor contract without information asymmetry, the comparative statics of its Stackelberg-type equilibrium shows that the rational economic decision making by the farmer (the principal) and the laborers (the agent) in changing economic circumstances was the main force of institutional change in the rice cropping area of the Philippines. The key idea is to introduce an incentive wage scheme. Since the wage of agricultural work must be paid by new rice crops, the work on weeding cannot be paid immediately. This gives the employing farmer an incentive to devise a wage scheme on the harvesting work that is a nondecreasing function of the amount of the weeding work. By restricting the wage scheme to the concave class, I show that the optimal choice of the wage scheme by the farmer is either constant or linear with a positive slope. The former corresponds to the Hunusan, while the latter with the target amount of weeding work by the farmer equal to the maximum he needs corresponds to the Gama. The transition from Hunusan to Gama in the period of late 1960s to early 1970s is explained by the rapid technological innovation, which increases the amount of weeding work the farmer needs. The transition from Gama to New Hunusan in the period of late 1980s to early 1990s is explained by the rapid increase of the wage of daily-contract work in the urban industrial area. Several technical problems existed in the earlier version of this article are corrected.
千葉大学の論文

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金子文洋
千葉大学

A Theoretical Rationalization of the Institutional Change in Rice Harvesting : The Case of the Philippines

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