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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

This paper analyze the colonial institutions set up by the British to collect land revenue 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, agricultural productivity and investments in public goods in the post-Independence period than areas in which these rights were given to the cultivators. It has been verified that these differences are not driven by omitted variables or endogeneity of the historical institutions, and argue that they probably arise because differences in institutions lead to very different policy choices. [Working Paper No. 003]

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  • Abhijit Banerjee & Lakshmi Iyer, 2010. "History Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," Working Papers id:2811, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2811
    Note: Institutional Papers
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    References listed on IDEAS

    as
    1. 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.
    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.
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    Keywords

    British; India; historical; landlords; agricultural; investments; independence; policy choices; history; land tenure; development;
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