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Schechter, Laura. 2007. "Theft, Gift-Giving, and Trustworthiness: Honesty Is Its Own Reward in Rural Paraguay."
,
97(5): 1560-1582.
Show Article Details
DOI: 10.1257/aer.97.5.1560
Abstract:In developing countries lacking legal enforcement, villagers may use implicit contracts
to minimize crime. I construct a dynamic limited-commitment model, in which
a thief cannot commit to forego stealing, but is induced to steal less by the promise of
future gifts. Combining survey data on production, theft, gifts, and trust with experiments
measuring trustworthiness, I provide supporting evidence. Farmers living near
more relatives or with plots that are difficult to steal from give fewer gifts and trust
more, and those living near more relatives also experience less theft. Giving increases
when trust is lower and the threat of theft is greater. (JEL D86, K42, O17, Z13)
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Authors:
Schechter, Laura (University of Wisconsin at Madison)
JEL Classifications:
D86: Economics of Contract: Theory
K42: Illegal Behavior and the Enforcement of Law
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Z13: Economic Sociology; Economic Anthropology
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