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

53 Pages Posted: 13 Aug 2002  

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

Lakshmi Iyer

Massachusetts Institute of Technology (MIT) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 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 cultivators. We verify 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.

Keywords: History, land tenure, development

JEL Classification: O11, P16, P51

Suggested Citation

Banerjee, Abhijit V. and Iyer, Lakshmi, History, Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India (June 2002). MIT Department of Economics Working Paper No. 02-27. Available at SSRN: https://ssrn.com/abstract=321721 or http://dx.doi.org/10.2139/ssrn.321721

Abhijit V. Banerjee (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Room E52-252D
Cambridge, MA 02142
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617-253-8855 (Phone)
617-253-6915 (Fax)

Lakshmi Iyer

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
617-253-3592 (Phone)
617-253-1330 (Fax)

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