Inequality, control rights, and rent seeking

Sugar cooperatives in Maharashtra

A. Benerjee, D. Mookherjee, K. Munshi, Debraj Ray

    Research output: Contribution to journalArticle

    Abstract

    This papers presents a theory of rent seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members. The tow key assumptions are constraints on lump-sum transfers from poorer members and dispro portionate control rights wielded by wealthier members. Transfers of rents to the latter are achieved by depressing prices paid for inputs supplied by members and diverting resulting retained earnings. The theory predicts that increased heterogeneity of landholdings in the local area causes increased inefficeincy by inducing a lower inputs price and a lower level of installed crushing capacity. Predictions concerning the effect of the distribution of local landownership on sugarcane price, capacity levels, and participation rates of different classes of farmers are confirmed by data from nearly 100 sugar cooperatives in the Indian state of Maharashtra over the period 1971-93.

    Original languageEnglish (US)
    Pages (from-to)138-190
    Number of pages53
    JournalJournal of Political Economy
    Volume109
    Issue number1
    DOIs
    StatePublished - 2001

    Fingerprint

    Control rights
    Farmers
    Rent-seeking
    Input prices
    Participation rate
    Ownership
    Prediction
    Retained earnings
    Rent
    Assets

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Inequality, control rights, and rent seeking : Sugar cooperatives in Maharashtra. / Benerjee, A.; Mookherjee, D.; Munshi, K.; Ray, Debraj.

    In: Journal of Political Economy, Vol. 109, No. 1, 2001, p. 138-190.

    Research output: Contribution to journalArticle

    Benerjee, A. ; Mookherjee, D. ; Munshi, K. ; Ray, Debraj. / Inequality, control rights, and rent seeking : Sugar cooperatives in Maharashtra. In: Journal of Political Economy. 2001 ; Vol. 109, No. 1. pp. 138-190.
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