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Economic Modernization in Late British India: Hindu-Muslim Differences


  • Timur Kuran
  • Anantdeep Singh


In South Asia, Muslims made the transition to modern economic life more slowly than Hindus. In the first half of the twentieth century, they were less likely to use large-scale and perpetual commercial organizations and less likely to serve on corporate boards. Providing evidence, this article also explores the institutional roots of the difference in communal trajectories. Whereas Hindu inheritance practices favored capital accumulation within families and the preservation of family fortunes across generations, the Islamic inheritance system, which the British helped to enforce, tended to fragment family wealth. The family trusts (waqfs) that Muslims used to preserve assets across generations hindered capital pooling among families; they were also ill suited to profit-seeking business. Another key difference is that while Hindus generally pooled capital within durable joint-family enterprises, Muslims tended to use transitory Islamic partnerships. Hindu family businesses facilitated the transition to modern corporate life by imparting skills useful in large and durable organizations.

Suggested Citation

  • Timur Kuran & Anantdeep Singh, 2013. "Economic Modernization in Late British India: Hindu-Muslim Differences," Economic Development and Cultural Change, University of Chicago Press, vol. 61(3), pages 503-538.
  • Handle: RePEc:ucp:ecdecc:doi:10.1086/669259

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    References listed on IDEAS

    1. Raquel Bernal & Michael P. Keane, 2011. "Child Care Choices and Children's Cognitive Achievement: The Case of Single Mothers," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 459-512.
    2. Kaushik Basu, 2006. "Gender and Say: a Model of Household Behaviour with Endogenously Determined Balance of Power," Economic Journal, Royal Economic Society, vol. 116(511), pages 558-580, April.
    3. Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719, June.
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    Cited by:

    1. Niklas Potrafke, 2016. "Policies against human trafficking: the role of religion and political institutions," Economics of Governance, Springer, vol. 17(4), pages 353-386, November.

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