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

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...

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Bibliographic Details
Published in:The American economic review 2005-09, Vol.95 (4), p.1190-1213
Main Authors: Banerjee, Abhijit, Lakshmi Iyer
Format: Article
Language:English
Subjects:
Agricultural land
British Empire
Collective action
Colonial history
Colonialism
Colonies & territories
Crops
Economic history
Economic impact
Economic performance
Economic theory
Economics
Education
Historical analysis
India
Land tenure
Landlords
Lessors
Peasant class
Political power
Productivity
Property rights
Revenue
Rice
Social conditions & trends
Studies
Wheat
Yield
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Summary: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.
ISSN:0002-8282
1944-7981
DOI:10.1257/0002828054825574