A Leibenstein–Hobbes–Walras Model of Sharecropping

Circumstances under which share tenancy may emerge as a socially viable and incentive‐compatible system of land‐labor exchange are explored in a model incorporating Leibenstein’s nutrition‐effort hypothesis, limited substitution possibilities and endogenous distribution. The model provides a Walrasian resolution of the traditional conundrum of production control under sharecropping. It is shown that a pure sharecropp ing equilibrium with tenant control exists when land is relatively abundant though land rent is zero under either a fixed‐rent or wage system. With land relatively scarce, a nearly‐symmetric equilibrium with landlord control also exists provided workers share income in the presence of unemployment.