Institutions and Informal Livelihoods: A Case of Cycle Rickshaw Pullers in Delhi

Abstract

One of the distinguishing features of Indian development is the predominance of informal sector livelihoods which has grown over time and space. However, not much is yet known about the character and dynamics of such livelihoods. The present study as such aims to explore the institutional relations surrounding the livelihood of cycle rickshaw pullers in urban area and in particular finding out the factors that makes their livelihood informal. The study is based on a sample survey of 26 rickshaw pullers undertaken in Delhi through snowball sampling method. The study finds that rickshaw pullers plying it have low human, physical and political capital relying instead on the social capital both for entry and operations. Secondly, most of them do not own and instead rent rickshaw owing to both difficulties in accessing ownership rights as well as perceived relative superiority of rental contract over ownership. The imperfect rickshaw market, interlinked transactions and the need to balance insurance and incentive by the risk-averse rickshaw pullers all contribute to the choice of rental contract. A parallel relation is drawn here with the sharecropping contract in land market of agriculture in rural areas of developing countries. Besides the similar conditions in both the cases, even the implications are strikingly similar in terms of inefficient outcome of the contract considering virtually no technological progress seen in cycle rickshaw operations over time. Finally, the study finds that the rental form of organization is also significantly influenced by the regulatory policy environment.