Gift-giving, Quasi-credit and Reciprocity

The fluctuations in incomes inherent in rural communities can be attenuated by reciprocal assistance. A model of reciprocal assistance based upon rational action and voluntary participation is presented. Individuals provide assistance only if the costs of so doing are outweighed by the benefits from expected future reciprocation. A distinction is made between general reciprocity, where the counter obligation is expected but not certain, and balanced reciprocity, where there is a firm counter obligation. This firm counter obligation is reflected by including a loan or quasi-credit element in any assistance. It is shown how this can increase the assistance given and it may explain the widespread use of quasi-credit in rural communities. Moreover, it is shown that for a range of parameter values consistent with evidence from three villages in southern India, a simple scheme of gift-giving and quasi-credit can do almost as well as theoretically better but more complicated schemes.

[1]  L. Telser.  A Theory of Self-enforcing Agreements , 1980 .

[2]  Richard A. Posner,et al.  A Theory of Primitive Society, with Special Reference to Law , 1980, The Journal of Law and Economics.

[3]  P. Bardhan.  The economic theory of agrarian institutions , 1991 .

[4]  Christopher Udry,et al.  Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria , 1994 .

[5]  H. P. Binswanger.  Attitudes toward risk: Experimental measurement in rural india , 1980 .

[6]  J. Fitzmaurice.  Economy and Society , 1998 .

[7]  R. Alexander.  Social Security in Chile , 1949 .

[8]  Samuel L. Popkin.  The rational peasant , 1980 .

[9]  J. Guasch,et al.  Rural credit markets and institutions in developing countries: Lessons for policy analysis from practice and modern theory , 1986 .

[10]  E. Cashdan.  Coping With Risk: Reciprocity Among the Basarwa of Northern Botswana , 1985 .

[11]  C. Udry.  Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy , 1990 .

[12]  Miles S. Kimball.  Farmers' Cooperatives as Behavior Toward Risk , 1988 .

[13]  K. Cook,et al.  Social Exchange Theory , 1989, Theoretical Sociology.

[14]  Mukesh Eswaran,et al.  Credit as insurance in agrarian economies , 1989 .

[15]  Bradley J. Ruffle.  Gift giving with emotions , 1999 .

[16]  Anthony F. Heath,et al.  Rational Choice and Social Exchange: A Critique of Exchange Theory , 1976 .

[17]  George M. Foster,et al.  Peasant Society and the Image of Limited Good , 1965 .

[18]  P. Millett.  Hesiod and his world , 1984 .

[19]  Robert M. Townsend,et al.  Risk and Insurance in Village India , 1994 .

[20]  J. D. Morrow.  Game Theory for Political Scientists , 1994 .

[21]  T. Walker,et al.  Village and household economics in India's semi-arid tropics , 1990 .

[22]  J. Platteau,et al.  An inquiry into quasi‐credit contracts: The role of reciprocal credit and interlinked deals in small‐scale fishing communities , 1987 .

[23]  B. Schwartz,et al.  The Social Psychology of the Gift , 1967, American Journal of Sociology.

[24]  H. Binswanger-Mkhize,et al.  Attitudes toward Risk: Theoretical Implications of an Experiment in Rural India , 1981 .

[25]  Marcel Fafchamps,et al.  Risk Sharing Networks in Rural Philippines , 1997 .

[26]  Martin Ravallion,et al.  Reciprocity without commitment: Characterization and performance of informal insurance arrangements , 1993 .

[27]  N. Takahashi.  The Emergence of Generalized Exchange , 2000, American Journal of Sociology.

[28]  J. Antle.  Econometric Estimation of Producers' Risk Attitudes , 1987 .

[29]  O. Stark.  Altruism and Beyond: An Economic Analysis of Transfers and Exchanges within Families and Groups , 1995 .

[30]  M. Mauss.  The Gift: The Form and Reason for Exchange in Archaic Societies , 1925 .

[31]  J. Coleman,et al.  Social Capital in the Creation of Human Capital , 1988, American Journal of Sociology.

[32]  J. Platteau.  Traditional systems of social security and hunger insurance: past achievements and modern challenges , 1991 .

[33]  J. Pender.  Discount rates and credit markets" Theory and evidence from rural india , 1996 .

[34]  M. Sahlins.  Stone Age Economics , 2020 .

[35]  L. Dearden,et al.  Social Security in a "Moral Economy": An Empirical Analysis for Java , 1988 .

[36]  J. Platteau.  Mutual insurance as an elusive concept in traditional rural communities , 1997 .

[37]  B. Malinowski.  Argonauts of the Western Pacific , 1922 .

[38]  Jonathan P. Thomas,et al.  Self-Enforcing Wage Contracts , 1988 .

[39]  Elizabeth Cashdan,et al.  Risk And Uncertainty In Tribal And Peasant Economies , 1989 .

[40]  B. Gordon.  Economic Analysis before Adam Smith , 1975 .

[41]  H. P. Binswanger.  Attitudes toward Risk: Theoretical Implications of an Experiment in Rural India , 1981 .

[42]  W. Hamilton,et al.  The evolution of cooperation. , 1984, Science.

[43]  Marcel Fafchamps,et al.  Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy , 1992, Economic Development and Cultural Change.

[44]  J. Solterer,et al.  The Economics of Justice , 1991 .

[45]  Michael Lipion.  The theory of the optimising peasant 1 , 1968 .

[46]  E. Fehr,et al.  Institutions and Reciprocal Fairness , 1996 .

[47]  W. Raub,et al.  Reputation and Efficiency in Social Interactions: An Example of Network Effects , 1990, American Journal of Sociology.

[48]  K. Hoff.  The economics of rural organization : theory, practice, and policy / ed by Karla Hoff … [et al] , 1993 .

[49]  A. Parikh,et al.  The Economic Theory of Agrarian Institutions. , 1990 .

[50]  A. Gouldner.  THE NORM OF RECIPROCITY: A PRELIMINARY STATEMENT * , 1960 .

[51]  Timothy Besley,et al.  The economics of rotating savings and credit associations , 1990 .

[52]  R. Townsend,et al.  The medieval village economy : a study of the Pareto mapping in general equilibrium models , 1994 .

[53]  T. Walker,et al.  Village and household economies in India''s semi-arid tropics. Baltimore, Md. U. S. A. : Johns , 1990 .

[54]  N. Folbre.  Altruism and beyond. An economic analysis of transfers and exchanges within families and groups - Stark,O , 1996 .

[55]  J. Spengler.  Economic Analysis Before Adam Smith: Hesiod to Lessius , 1977 .

[56]  Mark R. Rosenzweig,et al.  Risk, Implicit Contracts and the Family in Rural Areas of Low-Income Countries , 1988 .

[57]  B. Carruthers.  FROM CITY OF CAPITAL: , 2022, The New Economic Sociology.

[58]  N. Jones.  A selfish origin for human food sharing: Tolerated theft , 1984 .

[59]  D. Nettle.  Social Markers and the Evolution of Reciprocal Exchange , 1997, Current Anthropology.

[60]  Ethan Ligon,et al.  Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies , 2000 .

[61]  R. Evans,et al.  Reputation and Experimentation in Repeated Games with Two Long-Run Players , 1997 .

[62]  Dilip Abreu.  On the Theory of Infinitely Repeated Games with Discounting , 1988 .

[63]  P. Kollock.  SOCIAL DILEMMAS: The Anatomy of Cooperation , 1998 .

[64]  N. Stern,et al.  Palanpur, the economy of an Indian village , 1983 .

[65]  Colin Camerer.  Gifts as Economic Signals and Social Symbols , 1988, American Journal of Sociology.

[66]  A JOUBNAL,et al.  Reciprocity , 1899, The Hospital.

[67]  Karen S. Cook,et al.  Generalized Exchange and Social Dilemmas , 1993 .

[68]  Mark R. Rosenzweig,et al.  Imperfect Commitment, Altruism, and the Family: Evidence from Transfer Behavior in Low-Income Rural Areas , 2001, Review of Economics and Statistics.

[69]  R. Firth,et al.  Capital, Saving and Credit in Peasant Societies. Studies from Asia, Oceania, The Caribbean and Middle America. Essays edited with two general essays by R. Firth and B.S. Yamey. London, G. Allen and Unwin Ltd, 1964, 399 p., 45/–. , 1964, Recherches économiques de Louvain.

[70]  Daniel S. Lev.  The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia . By James C. Scott. (New Haven: Yale University Press, 1976. Pp. ix, 246. $15.00.) , 1977 .

[71]  Y. Ben-Porath,et al.  The F-connection: families friends and firms and the organization of exchange , 1980 .

[72]  P. Blau.  Exchange and Power in Social Life , 1964 .

[73]  Mark S. Granovetter.  Economic Action and Social Structure: The Problem of Embeddedness , 1985, American Journal of Sociology.

[74]  F. Hayashi.  ANALYSIS OF HOUSEHOLD SAVING: PAST, PRESENT, AND FURTURE* , 1996 .