In the Indian state of West Bengal many farmers work as sharecroppers (bargadars in the Bengali language), renting land from landowners in exchange for a share of the crop. The traditional contractual arrangements throughout this state varied little from village to village, with virtually all bargadars giving half their crop to the landowner at harvest time. This had been the norm since at least the eighteenth century. However, because of the extreme levels of deprivation among the bargadars many thought this was unfair. In 1973, 73% of the rural population lived in poverty, one of the highest poverty rates in India. In 1978, the newly elected Left Front government of West Bengal adopted new laws, called Operation Barga. The new laws stated that: • Bargadars could keep up to three-quarters of their crop. • Bargadars were protected from eviction by landowners, provided they paid them the 25% quota. Both provisions of Operation Barga were advocated as a way of increasing overall output and the incomes of the farmers. Indeed, Operation Barga was subsequently cited by the World Bank as an example of good policy for economic development. One study suggested that Operation Barga was responsible for around 28% of the subsequent growth in agricultural productivity in the region. The empowerment of the bargadars also had positive spillover effects as local governments became more responsive to the needs of poor farmers. (Question: What can Pareto efficiency tell us about the fairness and equality of allocations? When discussing your answer be sure to reference the specific case of Operation Barga)

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Pareto efficiency is a concept used to assess the fairness and equality of allocations in an economic system It states that an allocation is Pareto ef... View the full answer