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

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Author

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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.

Suggested Citation

  • Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    • Handle: RePEc:aea:aecrev:v:95:y:2005:i:4:p:1190-1213
    Note: DOI: 10.1257/0002828054825574
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    References listed on IDEAS

    as
    1. 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.
    2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
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    Replication

    This item has been replicated by:
  • Vegard Iversen & Richard Palmer-Jones & Kunal Sen, 2013. "On the Colonial Origins of Agricultural Development in India: A Re-examination of Banerjee and Iyer, 'History, Institutions and Economic Performance'," Journal of Development Studies, Taylor & Francis Journals, vol. 49(12), pages 1631-1646, December.

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