Traders, cops and robbers

We propose a simple model of trade outside the law preyed on by robbers and possibly protected by private cops. We establish the conditions for trade collapse, secure trade and insecure trade. Endogenous predation and enforcement can explain both puzzling failures of commonly observed state policies against illegal trade and puzzlingly large trade responses to liberalization in licit goods.     

Land Tenure, Investment Incentives, and the Choice of Techniques: Evidence from Nicaragua

The choice of cultivation techniques is a key determinant ofagricultural productivity and has important consequences forincome growth and poverty reduction in developing countries.Household data from Nicaragua are used to show that the choiceof cultivation technique depends on farmers' tenure status evenwhen techniques are observable and contractible. In particular,tree crops are less likely to be grown on rented than on owner-cultivatedplots. Further evidence indicates that the result follows fromlandlords' inability or unwillingness to commit to long-termtenancy contracts rather than from agency costs due to riskaversion or limited liability.     

Social capital in the workplace: Evidence on its formation and consequences

The existence of social ties between co-workers affect many aspects of firm and worker behavior, such as how workers respond to a given set of incentives, the optimal compensation structures for workers at different tiers of the firm hierarchy, and the optimal organizational design for the firm. This paper presents evidence on the social capital in one particular firm, as embodied in the friendship ties among its workers. We describe the structure of the friendship network as a whole and present evidence on the determinants of social ties. Finally, we review evidence from a field experiment we conducted in the firm to highlight one particular mechanism through which social capital significantly affects worker performance.