Got (clean) milk? Organization, incentives, and management in Indian dairy cooperatives

Manaswini Rao and Ashish Shenoy

Journal of Economic Behavior & Organization, 2023, vol. 212, issue C, 708-722

Abstract: Smallholder producers in developing countries often collaborate in teams that take advantage of scale economies and allocate surplus among members. We experimentally evaluate team-level incentive contracts for quality upgrading among Indian dairy cooperatives where there is a risk of free-riding because individual quality cannot be traced. Incentives improve aggregate quality, with evidence of increased effort from both producers and cooperative managers. However, several managers decline incentive payments when they cannot control how payment information is disclosed to cooperative members. Survey evidence indicates publicity lowers managerial returns, suggesting transparency-based efforts to constrain elites can undermine the core policy goal.

Keywords: Quality upgrading; Cooperatives; Dairy; Elite capture; India (search for similar items in EconPapers)
JEL-codes: D23 L23 O13 P13 Q13 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:212:y:2023:i:c:p:708-722

DOI: 10.1016/j.jebo.2023.06.002

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