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History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India

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  • Abhijit Banerjee
  • Lakshmi Iyer

Abstract

We analyze the colonial land revenue institutions set up by the British in India, and show that differences in historical property rights institutions lead to sustained differences in economic outcomes. Areas in which proprietary rights in land were historically given to landlords have significantly lower agricultural investments and productivity in the post-independence period than areas in which these rights were given to the cultivators. These areas also have significantly lower investments in health and education. These differences are not driven by omitted variables or endogeneity problems; they probably arise because differences in historical institutions lead to very different policy choices.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0002828054825574
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 95 (2005)
Issue (Month): 4 (September)
Pages: 1190-1213

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Handle: RePEc:aea:aecrev:v:95:y:2005:i:4:p:1190-1213

Note: DOI: 10.1257/0002828054825574
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  1. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  3. Thomas J. Kane & Cecilia Elena Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," NBER Working Papers 7235, National Bureau of Economic Research, Inc.
  4. Tirthankar Roy, 2002. "Economic History and Modern India: Redefining the Link," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 109-130, Summer.
  5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," NBER Working Papers 8460, National Bureau of Economic Research, Inc.
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  1. Historical Economic Geography

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