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

Abhijit Banerjee and Lakshmi Iyer

American Economic Review, 2005, vol. 95, issue 4, 1190-1213

Abstract: We analyze the colonial land revenue institutions set up by the British 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 and productivity in the post-independence period than areas in which these rights were given to the cultivators. These areas also have significantly lower investments in health and education. These differences are not driven by omitted variables or endogeneity problems; they probably arise because differences in historical institutions lead to very different policy choices.

Date: 2005
Note: DOI: 10.1257/0002828054825574
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Working Paper: History Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India (2010)
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