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

53 Pages Posted: 13 Aug 2002

See all articles by Abhijit V. Banerjee

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

Lakshmi Iyer

University of Notre Dame

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). 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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Lakshmi Iyer

University of Notre Dame ( email )

3054 Jenkins Nanovic Halls
Notre Dame, IN 46530
United States

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