| This study examines the role of ethnicity in labor contracting in Moi's Bridge Location, a polyethnic agricultural resettlement in western Kenya. The New Institutional Economics approach posits that obtaining information, negotiating, supervising, and enforcing contracts are all costly endeavors. Institutions may arise, or may be created to reduce these transaction costs. The thrust of the argument is that ethnicity can reduce transaction costs in contracting. Since information networks work better within ethnic groups than between them, and since ethnic institutions may be better able to provide sanctions against contract violations, it would follow that farmers would prefer to hire workers belonging to their own ethnic group.;I posited three hypotheses. Using data collected through participant observation, interviews, and random spot checks of time allocation, I tested these three hypotheses. The first hypothesis, that farmers would prefer to hire members of their own ethnic group was confirmed. Even though farmers did hire non-coethnics, they disproportionately hired within their own ethnic group. The second hypothesis, that there would be a variation in the types of contracts used by ethnicity, was also borne out, but only in the case of reciprocal labor exchange. Reciprocal labor exchanges involved delayed payments and longer-term obligations which required a greater reliability than other contracts, which were largely on-the-spot, short-term contracts.;The third hypothesis, that non-coethnic workers would shirk more was also not confirmed. Farmers did not report disproportionate dissatisfaction with work done by non-coethnic workers, neither did observation of posture during random spot checks indicate that non-coethnic workers rested more than coethnic workers. I argue that the method of compensation for most contracts, which were on the basis of the amount of land worked, or produce harvested, were self-motivating for workers. In addition, there was a high degree of supervision of hired workers, reducing the chances of contract violations. Contract violations that occurred were resolved mutually, mostly by farmers asking the workers to redo the tasks. Third party enforcement, which was principally the local Provincial administration, was not used by farmers in labor dispute resolutions. This study has demonstrated that while ethnicity is still a factor in labor transactions, the commercial approach to agriculture and labor, and the use of piece-rate wage contracts, have enabled cross-ethnic labor contracting. |
