Colonial Land Tenure, Electoral Competition and Public Goods in India
Executive Summary — How is the impact of historical institutions felt today? This comparative analysis by Banerjee and Iyer highlights the impact of a specific historical institution on long-term development, specifically the land tenure systems instituted during British colonial rule. The paper compares the long-term development outcomes between areas where controls rights in land were historically given to a few landlords and areas where such rights were more broadly distributed. The paper also documents the impact of these differing historical institutions on political participation and electoral competition in the post-colonial period. Key concepts include:
- There are large differences in the development trajectories of areas that had different land tenure systems under British colonial rule.
- In particular, areas that were put under the control of landlords lag behind in the provision of public goods such as schools and roads compared with areas in which control rights in land were given to small cultivators.
- These differences are discernible even four decades after the end of colonial rule, and three decades after the landlord-based land tenure systems were officially abolished.
- Political participation and literacy levels are lower in landlord areas, but these differences are not sufficient to explain the differences in public goods provision.
We examine the impact of historical land tenure systems on long-term development outcomes in India. We find that areas in which proprietary rights in land were historically given to landlords have lower levels of public goods such as schools and roads in the post-colonial period than areas in which these rights were given to the cultivators. We examine the role of economic inequality and political capture in explaining these outcomes. We find no significant differences in measures of economic inequality or political competition across these types of areas. While political participation is lower in landlord areas, the difference is not sufficient to explain the differences in public goods provision.