Long-Run Impacts of Land Regulation: Evidence from Tenancy Reform in India

Pande, Rohini; Besley, Timothy; Leight, Jessica; Rao, Vijayendra (2013)


Pande, Rohini, Timothy Besley, Jessica Leight, and Vijayendra Rao. 2013. “Long-Run Impacts Of Land Regulation: Evidence From Tenancy Reform In India”. Journal Of Developmental Economics.
Land reform policies have been widely enacted across the developing world. How-ever, despite the central importance of land as an asset in low-income economies, evidence about the long-run impact of such policies remains limited. In this paper, we provide evidence about these long-run effects by combining the quasi-random assignment of linguistically similar areas to South Indian states that subsequently pursued different tenancy regulation policies with cross-caste variation in landownership. Roughly thirty years after the bulk of land reform occurred, land inequality is lower in more regulated areas, but the impact differs by caste group. Tenancy reforms increase own-cultivation among middle caste households, but render low caste households more likely to work as daily agricultural laborers. At the same time, an increase in agricultural wages is observed. These results are consistent with credit markets playing a central role in determining the long-run impact of land reform: tenancy regulations increased land sales to the relatively richer and more productive middle caste tenants but reduced land access for poorer low caste tenants.