The implications of financial cooperation in Israel’s semi-cooperative villages

Moshe Justman, Eithan Hochman

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Financial cooperation, through credit sharing and cosigning of debts, was a source of strength for Israel’s semi-cooperative moshavim in the early decades of their development. But such cooperation entails a potential ‘free-rider’ problem when farmers’ borrowings are uncoordinated, and recent events in Israel have demonstrated the severe implications it can have. This chapter presents a theoretical analysis of the externalities generated by financial cooperation, and tests its conclusions empirically using Israeli data. Simulation results indicate that the potential instability of financial cooperation is aggravated when the moshav population is heterogeneous.

Original languageEnglish
Title of host publicationEconomic Analyses of Financial Crises
PublisherTaylor and Francis
Pages57-83
Number of pages27
ISBN (Electronic)9780429858055
ISBN (Print)9781138311909
StatePublished - 1 Jan 2019

Bibliographical note

Publisher Copyright:
© A. Levy-Livermore 1995. All rights reserved.

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