In developing countries lacking legal enforcement, villagers may use implicit contracts to minimize crime. I construct a dynamic limited-commitment model, in which a thief cannot commit to forego stealing, but is induced to steal less by the promise of future gifts. Combining survey data on production, theft, gifts, and trust with experiments measuring trustworthiness, I provide supporting evidence. Farmers living near more relatives or with plots that are difficult to steal from give fewer gifts and trust more, and those living near more relatives also experience less theft. Giving increases when trust is lower and the threat of theft is greater. (JEL D86, K42, O17, Z13)

Standard models of hierarchy assume that agents and middle managers are better informed than principals. We estimate the value of the informational advantage held by supervisors—middle managers—when ministerial leadership—the principal—introduced a new monitoring technology aimed at improving the performance of agricultural extension agents (AEAs) in rural Paraguay. Our approach employs a novel experimental design that elicited treatment‐priority rankings from supervisors before randomization of treatment. We find that supervisors have valuable information—they prioritize AEAs who would be more responsive to the monitoring treatment. We develop a model of monitoring under different scales of treatment roll‐out and different treatment allocation rules. We semiparametrically estimate marginal treatment effects (MTEs) to demonstrate that the value of information and the benefits to decentralizing treatment decisions depend crucially on the sophistication of the principal and on the scale of roll‐out.