We study an effective intervention into a specific form of bonded labor. The intervention led to a shift in agrarian contracts, from bonded labor to sharecropping. By comparing the pre- and post-liberation contracts we evaluate theoretical models of agrarian contracts. We suggest three mechanisms that jointly explain why landlords offered bonded labor contracts pre-liberation. One mechanism we apply to define bonded labor in co ntrast to tied labor. The mechanism, where the outside option as casual labor is endogenously determined by the choice of long-term contract, implies a trade-off for the landlord between efficiency and redistribution of surplus.

Agrarian institutions Tied labor

Agrarian Reform Eurasia agricultural policy Nepal sharecropping Tarai agricultural land South Asia Asia