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![Page 1: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/1.jpg)
Smallholder Identities and Social Networks:The Challenge of Improving Productivity and Welfare
A very preliminary draft
Christopher B. Barrett
July 2003
AAEA annual meetingsMontreal
![Page 2: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/2.jpg)
Poverty necessarily reflects relatively low productivity per capita, so work on improving productivity, especially in agriculture.
The empirical puzzle that motivates this paper:
Many recent studies find salutary effects of various measures of social embeddedness at micro level. But at macro level there seems a significant negative relation. Can we reconcile these two observations?
This paper (i) offers a more general analytical framework that nests within it issues of identity and social networks, then (ii) illustrates the usefulness of the framework with a few, brief, qualitative examples.
Very much an early work in progress!
![Page 3: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/3.jpg)
A General Analytical Approach
Build on Akerlof and Kranton (2000), acknowledging the
intrinsic value of identity, and making individual identity and
resulting social networks endogenous, with frictions created by
identity-dependent behavioral expectations. Nests the
instrumental effects found in the literature on social capital.
What is identity?
Collective identity and social networks
![Page 4: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/4.jpg)
A Behavioral Model
Max V(Aj0,Ij0,Kj0,Nj0) ≡ U(ej0,c-j0,rj0,sj0) + δV(Aj1,Ij1,Kj1,Nj1) (1)cj0,ej0
Objective function captures intrinsic valuation of one’s psychological and social status as well as interpersonal externalities due to altruism, positional externalities, or both.
sj0 = s(Ij0,cj0) (2)rj0 = r(Nj0,cj0) (3)
ej0 ≤ P(Ij0,Nj0)[L(cj0,Kj0) + Aj0] + B(Ij0,Nj0) - F(cj0) (4)
where F(cj0) = 0 for L(Ij0) ≤ cj0 ≤ H(Ij0) (5) = Φ(cj0,Ij0,Nj0) > 0 otherwise
![Page 5: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/5.jpg)
Laws of motion:
Aj1 = a(Aj0,ej0,cj0,c-j0) (6)
Nj1 = f(Nj0, Ij1, cj0, c-j0) (7)
Ij1 = f(Ij0, rj0, cj0, c-j0) (8)
Kj1 = k(Kj0,Ij0,I-j0,rj0, cj0, c-j0) (9)
![Page 6: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/6.jpg)
Some Implications of the Model
(i) Productivity and expenditures are increasing in one’s density of social networks and for those possessing particular identities due to- Higher net payoffs- Faster learning- Better access to informal finance
(ii) Social networks and identity confer intrinsic benefits as well as instrumental value. People routinely make tradeoffs between the two.
(iii) Identity-dependent behavioral expectations constrain choice. Separating equilibria based on identity. Finance problematic.
![Page 7: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/7.jpg)
Some Implications of the Model (continued)
(iv) Movement to a higher productivity equilibrium often depends on coordinated action among a critical mass of members within a community. - homophily and strong link networks: power to coordinate, but also power to subjugate/exploit
(v) Egalitarian pressures that can impede investment by creating very high de facto marginal tax rates
![Page 8: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/8.jpg)
Four Sample Puzzles
Foregoing significant productivity gains
(a) Conformity, tradition and rice intensification in Madagascar - Ceremonial expenses: famadihana, zebu sacrifice
- Green revolution methods: Taboos and work restrictions- SRI: Ancestral tradition and social conformity* identity and strong social networks impediments
(b) Striga control in Kenyan maize systems- non-host trap crops (A. histrix)* lack of strong social networksan impediment
![Page 9: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/9.jpg)
Four Sample Puzzles (continued)
Strategies to facilitate gains
(c) Boarding schools for poor children- not just school quality differences: remaking identity
(d) Farmer field schools- aim to stimulate farmer experimentation and to build theirconfidence: identity transformationand creation of common knowledge.
![Page 10: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/10.jpg)
Conclusions: Research Implications
(i) Intrinsic value of identities and social networks?(ii) Importance of coordination failures or conformity
effects as adoption barriers/(iii) do behavioral expectations constrain individual
activity and investment choice?(iv) dynamic effects of current behaviors on endogenous
identity/networks
Serious identification problems: significant role for qualitative research
![Page 11: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/11.jpg)
Conclusions: Policy Implications
Opportunity for policy due to(i) Coordination failures and multiple equilibria(ii) Externalities
Tipping points may be influenced/overcome by- traditional instruments (subsidies, finance, etc.)- targeting: indicator/community in spite of leakage?
Question enthusiasm for creating groups if one does not shape identity (FFS model)
Beware overemphasis on material well-being
![Page 12: Smallholder Identities and Social Networks: The Challenge of Improving Productivity and Welfare A very preliminary draft Christopher B. Barrett July 2003.](https://reader036.fdocuments.us/reader036/viewer/2022072015/56649ed15503460f94be0a81/html5/thumbnails/12.jpg)
Thank you for your
time, patience and comments!