Nicaraguan collective cooperatives : a study of choice, efficiency and performance

Cooperators vested with democratic choice in the operation of an agricultural production cooperative (APC) can be expected to respond rationally to opportunities presented by collective cultivation. Economic efficiency is theoretically attainable if cooperators devote sufficient attention to linking effort and reward, thereby assuring work incentives and labor delivery. The attainment of adequate work incentives also understands a neutral administration of state policy; that is, one that is not biased in its relation to different property regimes. In Nicaragua cooperators on APCs took steps, once the state had granted them more freedom in the management of their enterprise, that appeared to confirm expectations. Greater self-determination encouraged allocational and internal management policies, particularly as affected land use, crop choice, payment rules and the organization of work, that were sufficient to promote work incentives and encourage labor delivery. The Nicaraguan APCs appeared to have contained within limits the work incentive frictions common to team production. Consequently, economic performance on the Nicaraguan APCs compared favorably to family or capitalist farms. Efficiency and welfare gains under alternative tenure forms were not necessarily attainable.