Looking for Causes of Effects: Imperfect Contract Enforcement in Kenya's French Bean Market

We introduce a fast and inexpensive method to rule out potential barriers to adopting a technology. We use this method to asses the role of exogeneous contract enforcement as a barrier to market for Kenya's French Bean export market. We survey 240 farmers in Kirinyaga County, Kenya who were specifically recruited as matching pairs of geographically-nearest neighbors. We use a choice experiment as our instrument to estimate the effect of imperfect contract enforcement on their intensive and extensive supply margins. Then we use the differences in choice experiment results between matched pairs to rule out forces which are not serving as barriers to entry in this market. We find that imperfect contract enforcement impacts the extensive supply margin by deterring entry and sparking exit from the market, and reduces the amount of land allocated to French bean production on the intensive margin. We also find that underlying heterogeneity in farmers' costs to provide high quality French beans does not impact the overall decision to supply export markets. It does, however, determine whether the contracting farmer self-selects between supplying the fresh and processed export markets. These findings can help explain why previous development interventions to connect small-scale producers to these markets were not successful in the long-term, and suggest options for alternative policies better targeted to the issue of contract enforcement.