History, institutions and economic performance : the legacy of colonial land tenure systems in India PDF
Preview History, institutions and economic performance : the legacy of colonial land tenure systems in India
MITLIBRARIES lb 3 9080 02527 85 :i Digitized by the Internet Archive in 2011 with funding from Boston Library Consortium IVIember Libraries http://www.archive.org/details/historyinstitutiOObane ubW^ !1 15 Massachusetts Institute of Technology Department of Economics Working Paper Series History, Institutions and Economic Performance: Tlie Legacy of Colonial Land Tenure Systems in India Abhijit Baneq'ee Lakshmi Iyer Working Paper 02-27 June 2002 Room E52-251 50 Memorial Drive MA Cambridge, 02142 This paper can be downloaded without charge from the Social Science Research Network Paper Collection at http://ssrn.com/abstract_ id=xxxxx Slt^Zi MASSACHUSEHS INSTITUTE OFTECHMOLOGY LlD,.^ ICCJ Massachusetts Institute ot Technology Department Economics of Working Paper Series History, Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India Abhijit Banerjee Lakshmi Iyer Working Paper 02-27 June 2002 Room E52-251 50 Memorial Drive MA Cambridge, 02142 This paper can be downloaded without charge from the Social Science Research Network Paper Collection at http://ssrn.com/abstract_.id=xxxxx History, Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India * Abhijit Banerjee ^ Lakshmi Iyer* June 2002 Abstract Do historical institutions have a persistent impact on economic performance? We 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 cul- tivators. We verify that these differences are not driven by omitted variables or endogeneity of the historical institutions, and argue that they probablj' arise because differences in institutions lead to very different policy choices. Keywords: history, land tenure, development JEL classification: OH, P16, P51 'WetfiankDaron Acemoglu, Sam Bowles, EstherDuflo, Maitreesh Ghatak, KarlaHoff, Kaivan Munshi, Raghuram Rajan, AndreiShleiferand participants inthetheMIT-Harvard DevelopmentSeminar, theNorth-Eastern Universities Development Conference and the MIT Development Economics and Organizational Economics Lunch for helpful comments, Nabeela Alam and Theresa Cheng for research assistance and Michael Kremer for help in accessing historical land tenure data. ^Department ofEconomics, MIT. [email protected] ^Department ofEconomics, MIT. [email protected]
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