The Role of Social Ties in Factor Allocation
This paper investigates whether social structure helps or hinders factor allocation using unusually rich data from The Gambia. Evidence indicates that land available for cultivation is allocated unequally across households; and that factor transfer...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/625951519134631616/The-role-of-social-ties-in-factor-allocation http://hdl.handle.net/10986/29403 |
| Summary: | This paper investigates whether social
structure helps or hinders factor allocation using unusually
rich data from The Gambia. Evidence indicates that land
available for cultivation is allocated unequally across
households; and that factor transfers are more common
between neighbors, co-ethnics, and kinship related
households. Does this lead to the conclusion that land
inequality is due to flows of land between households being
impeded by social divisions? To answer this question, a
novel methodology that approaches exhaustive data on dyadic
flows from an aggregate point of view is introduced. Land
transfers lead to a more equal distribution of land and to
more comparable factor ratios across households in general.
But equalizing transfers of land are not more likely within
ethnic or kinship groups. In conclusion, ethnic and kinship
divisions do not hinder land and labor transfers in a way
that contributes to aggregate factor inequality. Labor
transfers do not equilibrate factor ratios across
households. But it cannot be ruled out that they serve a
beneficial role, e.g., to deal with unanticipated health shocks. |
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