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http://ssrn.com/abstract=1747193
 
 

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Economic Modernization in Late British India: Hindu-Muslim Differences


Timur Kuran


Duke University - Department of Economics

Anantdeep Singh


University of Southern California - Center for Religion and Civic Culture

December 2011

Economic Research Initiatives at Duke (ERID) Working Paper No. 92

Abstract:     
The Muslims of South Asia made the transition to modern economic life more slowly than the region’s Hindus. In the first half of the twentieth century, they were relatively less likely to use large-scale and long-living economic organizations, and less likely to serve on corporate boards. Providing evidence, this paper 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. Whereas Hindus generally pooled capital within durable joint family enterprises, Muslims tended to use ephemeral Islamic partnerships. Hindu family businesses facilitated the transition to modern corporate life by imparting skills useful in large and durable organizations.

Number of Pages in PDF File: 44

Keywords: India, Islam, Hinduism, capital accumulation, inheritance, partnership, corporation, waqf, economic development

JEL Classification: N25, N85, K22, O53, P48

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Date posted: January 25, 2011 ; Last revised: March 23, 2012

Suggested Citation

Kuran, Timur and Singh, Anantdeep, Economic Modernization in Late British India: Hindu-Muslim Differences (December 2011). Economic Research Initiatives at Duke (ERID) Working Paper No. 92. Available at SSRN: http://ssrn.com/abstract=1747193 or http://dx.doi.org/10.2139/ssrn.1747193

Contact Information

Timur Kuran (Contact Author)
Duke University - Department of Economics ( email )
Durham, NC 27708-0204
United States
Anantdeep Singh
University of Southern California - Center for Religion and Civic Culture ( email )
Los Angeles, CA 90089
United States
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