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Abstract
This paper examines the allocation of productive resources within rural households
of poor countries. Building upon the existing literature, it provides a consistent
framework from which to study productive efficiency and intrahousehold equity. The
topics discussed include returns to scale and household centralization; specialization and
gender casting; separate spheres and commitment failure; labor market cartelization and
discrimination; and the provision of home public goods in the presence of free riding. We
show that intrahousehold productive inefficiency should not arise unless household
members are prevented from entering into enforceable side contracts. Our analysis
predicts that intrahousehold inefficiency increases with factors that exacerbate
commitment failure such as short time horizon, low assets, unequal stakes in the
household, and poor external enforcement. Patrimonial laws and customs regarding
inheritance and divorce can be understood as efforts to mitigate commitment failure within
the household.