Francia, Joseph H
(1990)
The economics of indigenous cooperation: A case study of work teams in Philippine agriculture.
MPhil thesis, London School of Economics and Political Science.
Abstract
The primary objective of the thesis is to analyze, from an economic viewpoint, the determinants of cooperation among farmers in developing countries. In pursuing this objective, quite diverse but interrelated literature were reviewed: general economic theories of cooperation; property rights; origin and nature of the firm, and indigenous cooperation. From the review of the literature seven factors were deduced as determining agricultural cooperation, with six of them affecting cooperation in general. The validity of these in determining cooperation among farmers was then tested by means of case studies and a sample survey. First is the presence or absence of indivisibilities in productive inputs and/or processes. Second is whether timeliness in the execution of farm tasks is necessary. Third is the degree of elasticity of substitution among such inputs and/or processes. Fourth is the presence or absence of economies, whether size/scale economies or associational economies. Fifth is the extent of transaction costs, which consist of search, information, bargaining, decision-making and monitoring costs. Sixth is the extent of inequality in the distribution of income/assets among the potential members of a group. And seventh is the kind of atmosphere that surrounds the exchange relationship. Empirical research focused on Northern and Central Luzon in the Philippines. The most widespread form of indigenous cooperation in these two regions was the formation of labour teams to transplant and reap paddy. These were analyzed by means of a case study of two agricultural teams and a sample survey of twenty eight agricultural teams. The results indicated that six of the seven hypothetical variables were operative. Indivisibilities were not a relevant factor because they were absent from the farm tasks involved. Nevertheless, this cannot be interpreted to mean that this variable would be irrelevant in other tasks such as irrigation. Income/asset distribution was highly skewed but its potential for diminishing cooperation in the case of the two study teams was countered by the presence of other factors such as neighbourhood and kinship, which created a bond among members. However, it should showed up as a significant variable in the sample survey. As for the other variables, the results indicated that the existence of the labour teams and the degree of cooperation achieved were the result of (1) the necessity for the timely accomplishment of farm tasks; (2) a zero elasticity of substitution between labour and machinery; (3) the realization of both associational and scale economies; (4) low transaction costs; and (5) the existence of a non-calculative atmosphere.
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