Wednesday, July 27, 2011

Land distribution and inequality in West Bengal

This paper uses data from a household survey to estimate changes in land distribution in rural West Bengal between 1967-2004 and decompose these into contributions of different factors. There was a substantial drop in land per household and land per capita, while within-village inequality rose. The latter was associated mainly with rising landlessness induced by high rates of household division for marginal and small landowning households. Conversely, division of large landowning households reduced inequality. We find a significant indirect effect of the tenancy reform (Operation Barga) on inequality, as it reduced division rates of small landowning households while raising those of large landowning households. The land titling (patta) program also reduced inequality by reducing landlessness. Land markets were highly active, and were mildly equalizing. The inequality reducing effects of land reforms and land markets were dwarfed by the rising inequality and landlessness induced by division of small landowning households and immigration.

Full paper by Pranab Bardhana, Michael Lucab, Dilip Mookherjee, and Francisco Pino here. Seems like inequality was reduced by breaking away landholdings of large landowning households and by implementing land titling program. But, inequality and landlessness also increased as smallholding lands (and immigration) were further divided. The latter effect overshadowed the former gains.