The economic consequences of mutual help in extended families

Baland, Jean‐Marie; Bonjean, Isabelle; Guirkinger, Catherine; Ziparo, Roberta

doi:10.1016/j.jdeveco.2016.07.004

Cited by 42 publications

(27 citation statements)

References 18 publications

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“…Indeed, there is a large literature emphasizing the important role that these networks continue to play in economic affairs in sub-Saharan Africa (for recent studies on the subject, see, for example, di Bulte (2011, 2013); Baland et al (2013)). But evolution in the composition of the household raises the question whether nuclear family households, in any fundamental way, operates differently from extended family households.…”

Section: Evolution Of Household Composition In West Africamentioning

confidence: 99%

“…For any given y, the maximum transfer that i is willing to make in a selfenforcing agreement is increasing in δ ij , because a larger value of δ ij translates into a stronger preference for the expenditures made by j and the same applies to j. 5 Consequently, it can be shown that larger δ ij , δ ji values will lead to greater consumption smoothing. In the extreme, if δ ij = δ ji = 1 and δ ic = δ jc , we obtain efficient risk-sharing within the group.…”

Section: The Effect Of Stronger Ties Within the Householdmentioning

confidence: 99%

“…Guirkinger and Platteau (2014) obtain similar results in the context of rural Mali. 5 Ligon, Thomas and Worrall (2002) and Fafchamps (1992) investigate in detail how changes in preference parameters affect the scope of risk-sharing within a group in the absence of external enforcement.…”

Section: Description Of Survey and Descriptive Statisticsmentioning

confidence: 99%

“…The role of extended families and kinship networks in economic interactions has received considerable attention from economists in recent years (see Cox and Fafchamps 2008 for a review; and di Bulte (2011, 2013), Baland et al (2013) for recent work on subSaharan Africa). However, this literature generally focuses on extended family members who inhabit separate households and do not provide insights about the functioning of extendedfamily households as compared to nuclear family households.…”

Section: Introductionmentioning

confidence: 99%

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Intra-Household Resource Allocation and Familial Ties

Kazianga

Wahhaj

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn this paper, we investigate the link between intra-household resource allocation and familial ties between household members. We show that, within the same geographic, economic and social environments, households where members have 'stronger' familial ties (e.g. a nuclear family household) achieve near Pareto efficient allocation of productive resources and Pareto efficient allocation of consumption while households with 'weaker' familial ties (e.g. an extended family household) do not. We propose a theoretical model of the household based on the idea that altruism between household members vary with familial ties which generates predictions consistent with the observed empirical patterns. Non-Technical SummaryThe question as to how resources are allocated within households has long been of interest to economists. Particularly in societies where state support and market institutions are weak, the household remains an important unit of production, and investment in the human capital of children.The two theories of intra-household allocation that have received the most attention in the academic literature and tested most frequently using household data are the Unitary Model and the Collective Model. The Unitary Model, which postulates that the household behaves as if it were a single individual, has been consistently rejected by empirical evidence. On the other hand, tests of the Collective Model, which postulates that household members with conflicting preferences are able to achieve Pareto efficient outcomes, have yielded mixed results --not rejected for labour supply decisions in developed countries or consumption decisions in developing countries, but commonly rejected for production in African households.In this paper we investigate intra-household resource allocation in rural Burkina Faso and show that, within the same geographic, economic and social environment nuclear-family households achieve near Pareto efficiency in allocating productive resources and Pareto efficient allocation of consumption, while extended-family households do not.We propose a theory where household members with closer familial ties exhibit higher levels of altruism towards each other, which in turn motivate them to make intra-household transfers close to that required for efficiency. The theory predicts that household members who share a nuclear family tie (as opposed to an extended-family tie or no family ties) should contribute higher ...

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Section: Evolution Of Household Composition In West Africamentioning

confidence: 99%

Section: The Effect Of Stronger Ties Within the Householdmentioning

confidence: 99%

Section: Description Of Survey and Descriptive Statisticsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Intra-Household Resource Allocation and Familial Ties

Kazianga

Wahhaj

2016

SSRN Journal

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“…Key to such informal arrangements are that they are reciprocal, involve state-contingent resource transfers towards those facing negative shocks and they are efficiency enhancing. Such kinship tax distortions have been documented to exist across a range of household decisions including those related to consumption (DiFalco andBulte, 2011), savings (Boltz-Lemmel, 2013), labour market participation (Baland et al, 2015) and capital allocations into family enterprises (Squires, 2016). In contrast to risk-sharing transfers, such resource flows need not be reciprocal or be channelled towards poorer network members and, most importantly, their existence typically entails efficiency costs through distortions.…”

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confidence: 99%

Consumption and Investment in Resource Pooling Family Networks

Angelucci¹,

Giorgi

2017

The Economic Journal

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This article examines a novel motive for resource pooling in family networks in rural economies: to relax credit constraints and facilitate investment in non-collateraliseable assets for which credit market imperfections are most binding. We thus complement established literatures examining risksharing motives for resource transfers within family networks, as well as motives based on kinship tax obligations. We do so exploiting the Progresa programme data, in which family networks can be identified, households are subject to large exogenous resource inflows, and detailed responses on consumption and an array of investments can be tracked in a household panel over five years.

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Gotong Royong: An Indigenous Institution of Communality and Mutual Assistance in Indonesia

Slikkerveer

2019

Cooperative Management

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The economic consequences of mutual help in extended families

Cited by 42 publications

References 18 publications

Intra-Household Resource Allocation and Familial Ties

Intra-Household Resource Allocation and Familial Ties

Consumption and Investment in Resource Pooling Family Networks

Gotong Royong: An Indigenous Institution of Communality and Mutual Assistance in Indonesia

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