Understanding the relationship between politics and economic policy is central to understanding the development process in low-income countries. This research will study the experience of the state of West Bengal, India, which embarked on a set of institutional reforms based on land reform and decentralized governance in the agrarian sector for the past quarter century. Besides their agrarian focus, these reforms differ from "Washington consensus"-style policy reforms occurring in many developing countries during this period in that they were explicitly aimed at reducing poverty: their principal thrust was to redistribute assets and improve delivery of public services to the poor. The reforms were accompanied by faster growth of agricultural output, diffusion of high yielding varieties of rice, and diversification by farmers into cash crops. The research will be based on detailed micro data already collected for a sample of 89 West Bengal villages covering land reform, activities of elected local government, evolution of demographics, land distribution, education, occupations and caste, and production on farms of varying size.
The first question addressed by the research concerns the main political motives for land reform. Were they driven by political ideology of the Left party in power, or by pressures of electoral competition, or reduced power of landed elites to block such reforms? It will also evaluate the effect of the land reform in changing the distribution of landownership within these villages, relative to the effects of market transactions and family fragmentation. The second component of the research will assess the pro-poor targeting of various farm inputs and development programs implemented by local governments, to infer the extent they were politically accountable to the poor. Combined with the first part of the research, it will try to empirically assess the importance of the land reform in ensuring the antipoverty success of the decentralization program.
The third and final part of the research will assess the impact of these institutional reforms on the dynamics of farm productivity. It will measure growth in farm productivity in these villages, the extent to which such growth in different size categories was driven by diffusion of high yielding rice varieties, diversification into cash crops, changes in landownership, tenancy or sharecropper status, supplies of credit, fertilizer, seeds, irrigation by local governments, after controlling for changes in rainfall and other environmental factors. The direct and indirect effect of the land reform and supply of farm inputs on farm productivity and rural wages can then be evaluated, after controlling for alternative potential explanations for agricultural growth such as changing prices or patterns of social learning. This research will provide a better understanding of the link between politics, decentralized decision making, agricultural productivity growth, and poverty eradication in low-income countries.
