Land Rezoning and Structural Transformation in Rural India: Evidence from the Industrial Areas Program

David Blakeslee (), Ritam Chaurey, Ram Fishman and Samreen Malik

No 9541, Policy Research Working Paper Series from The World Bank

Abstract: Zoning laws that restrict rural land to agricultural production pose an important institutional barrier to industrial development. This paper studies the effects of the Industrial Areas (IA) program in Karnataka, India, which rezoned agricultural land for industrial use, but without the economic incentives common with other place-based policies. This paper finds that the program caused a large increase in firm creation and employment in villages overlapping the IAs. Moreover, the surrounding areas experienced spillover effects, with workers shifting from agricultural to non-agricultural employment, and entrepreneurs establishing numerous small-scale service sector and agricultural firms.

Keywords: Pulp&Paper Industry; Plastics&Rubber Industry; Textiles; Apparel&Leather Industry; Food&Beverage Industry; Common Carriers Industry; Construction Industry; Business Cycles and Stabilization Policies; General Manufacturing; Food Security; Employment and Unemployment; Macroeconomics and Economic Growth; Economic Policy; Institutions and Governance; Rural Labor Markets; Labor Markets (search for similar items in EconPapers)
Date: 2021-02-09
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (1)

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