<Articles>Contractual Enforcement in Export-Oriented Handicraft Trading in Northeastern Ghana: Focusing on Pseudo-Contractual Relationships between Local Intermediaries and Producers

This study examines contractual enforcement in the Bolga basket industry, an exportoriented handicraft industry in northeastern Ghana. Recent consumer preference trends in developed countries, such as appreciation of handicraft and ethical product, have stimulated Bolga basket exports. Wholesale companies and local intermediaries enter into binding contracts on production terms to meet changing demands of quality and quantity in the target markets. To enforce these contracts, intermediaries have developed pseudo-contractual relationships, locally called "contracts, " with basket weavers. However, a close investigation of these transactions reveals that weavers often fail to keep their advanced agreement (e.g., delivery deadlines). Intermediaries are on the weaker side of the bargain and, being from the same community, cannot resort to sanctions, such as transaction termination, to deter default. Instead, they de-emphasize weavers' obligations and enter "contracts" with as many weavers as possible to offset the losses from defaulters. To develop long-term relationships, they rearrange the production terms, taking weavers' diversified livelihood strategies and mindset into account. Furthermore, they repeatedly negotiate with weavers, evoking reciprocal cooperation and/or shared experiences of "working together" for the agreements to be fulfilled. In conclusion, by defining trust as an expectation of another person's goodwill under uncertainty, this study argues that the marketing cycle of Bolga baskets functions when intermediaries transform sanction- and obligation-based contractual relationships with companies into relationships of trust with weavers, based on acceptance of uncertainty and risk negotiation