Distributional Change in Palanpur
Over Seven Decades:
Studying Economic Development
Through the Lens of a Village
Peter Lanjouw (VU Amsterdam)
Italian Development Economics Association
Summer School in Development Economics
Prato, Italy
June 20, 2017
Background to presentation
• Talk based on a project with Himanshu (JNU) and
Nicholas Stern (LSE)
– Many additional collaborators
• I draw on material from a forthcoming volume
tentatively entitled:
“A Village, a Country and a Discipline: Economic
Development in Palanpur over Seven Decades”
– Follow-up to Bliss and Stern (1982), Lanjouw and Stern
(1998), Himanshu, Lanjouw, Murgai and Stern (2009)
Overview
Road-map:
• Birds-eye view of economic development in one
village over seven decades
– Agricultural change
– Structural transformation out of agriculture
• How does this compare with India as a whole?
• Evolution of distributional outcomes
–
–
–
–
Poverty trends and poverty dimensions
Income inequality at the village level
Income mobility
Human development
• Pointers for the study of development economics
Palanpur: the Village and the Study
• A small village in Moradabad District, Uttar Pradesh.
– Small holder agriculture (wheat, paddy, sugarcane …).
– Diverse caste structure (dominant castes by population: Thakur, Murao
and Jatab).
• Has been surveyed seven times.
• Original choice of village by Bliss and Stern (1974). Criteria:
– Studied before.
– Ability to live independently of a caste or household.
– Proximity to Delhi (not too close, not too far)
• Approx 200 km, full day of travel
– Ability to look both at “green revolution” and at, then, current
theories of development.
– Thus criteria that wheat and tenancy strongly present.
– Nothing ‘particularly unusual’ about the village.
Palanpur Village in Moradabad District
The Palanpur Surveys
• 1957/8
• 1962/3
 Conducted by AERC; census of village;
rich questionnaire; Ansari Report;
continuity of field investigators
• 1974/5
 Christopher Bliss and Nicholas Stern; nine
months of fieldwork; focus on agriculture
and tenancy; Bliss and Stern (1982)
• 1983/4
 Naresh Sharma and Jean Dreze; 15
months of field work; rich agricultural,
non-farm and qualitative data collection;
Lanjouw and Stern (1998)
The Palanpur Surveys, cont
• 1993
 Quick survey by Naresh Sharma and Jean
Dreze; updating land and population profile;
no income data
• 2008/10
 Himanshu and team from JNU/LSE; data
collection over two years; data expanded to
consumption, health, education, gender, etc.
• 2015
 Quick follow up data collection using tablets;
demographics, occupation and cropping
patterns, tenancy and assets; no income
8
10
11
Palanpur Village Profile 1993 and 2008
1993
Location
2008
13 kilometers north of Chandausi a small town in Moradabad
district; 31 kilometers south of the city of Moradabad
Population
1,133
1,270
Number of Households
193
236
Average Household Size
5.93
5.42
Female/Male Ratio
0.85
0.98
Main Hindu Castes
Thakur, Murao, Dhima, Gadaraia, Passi, Jatab
Main Muslim Castes
Proportion of the population in
different caste groups
Main economic activities
Percent Landless Households
Main Crops
Main Public Ameneties
Dhobi, Teli
Thakur
25.0
22.9
Murao
25.9
24.4
Muslim
12.5
14.8
Jatab
11.7
16.2
Other
24.9
21.7
Agriculture, livestock, wage employment outside the village
23%
27%
Wheat, rice, menthe, sugarcane, bajra, pulses, jowar, potatoes
Primary school, railway station, temples, wells, pond
Broad economic indicators of change in Palanpur
Year
Population
Number of households
Average Household Size
Real per capita income (at 1960-1
prices)
Per capita land owned(bigha)
1957-8
529
100
5.3
1962-3
585
106
5.5
1974-5
750
112
6.7
1983-4
977
143
6.8
1993
1133
193
5.9
2008-9
1255
233
5.4
189.63
5.2
211
4.64
265.11
3.33
237.69
2.65
NA
2.1
411.88
1.59
Gini coefficient: Land owned per
capita
0.47
0.44
0.42
0.48
0.45
0.45
Gini coefficient: Land operated per
capita
0.44
0.38
0.32
0.43
0.43
0.4
• The population and per capita incomes more than doubled since 1957-8.
• An increasing nuclearization of joint family households
• Significant decline in per capita land ownership.
Agricultural output and agricultural
wage growth
MECHANISATION IN PALANPUR OVER 50 YEARS
1957 1962- 1974 1983 1993 2008
-8
3
-5
-4
-4
-9
Tractors 0
0
0
1
8
15
Bullocks 235
240
197
124
138
93
Persian
Wheels
21
29
28
28
0
0
Borewell
0
0
9
28
36
76
19
CROPPING PATTERN IN PALANPUR: NEW CASH CROPS SUCH AS MENTHA HAVE
EMERGED. DECLINING SHARE OF COARSE CEREALS SUCH AS BAJRA AT THE
EXPENSE OF PADDY
Cropping Pattern in Palanpur (share of gross cropped area)
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Wheat
Mentha
Paddy
1957/8
1974/5
Bajra
1983/4
Sugarcane
Other crops
2008/9
20
CULTIVATION DETAILS FOR SELECTED MAJOR CROPS IN PALANPUR I
1957–8
1962–3
1974–5
1983–4
2008-09 a
a) Area cultivated (bighas)
879
767
1030
1573
984 (1438)
b) % of total cultivated area
52
48
46
57
48 (71)
c) Yield (kg/bigha)
41
41
114
101
224 (223)
d) ‘Normal’ Yield (kg/bigha)
40-50
50
100
150-60
230
d) Real Output Value/bigha 1
16
22
41
27
69 (69)
a) Area cultivated (bighas)
0
0
0
0
226 (728)
b) % of total cultivated area
0
0
0
0
11 (36)
c) Yield (litres/bigha)
n/a
n/a
n/a
n/a
3.9 (2.9)
d) Real Output Value/bigha 1
n/a
n/a
n/a
n/a
62 (47)
Crop
1. Wheat: Still the main crop
2. Mentha : A New Cash Crop
1. Real values are obtained by deflating with price deflators based on the Consumer Price Index for Agricultural Labourers (CPIAL) for
Uttar Pradesh. All values are in 1960–1 rupees.
a. The figures in brackets show total figure including plots sown with mixed crops.
21
CULTIVATION DETAILS FOR SELECTED MAJOR CROPS IN PALANPUR I
Crop
1957–8
3. Paddy: Growing in Importance
1962–3
1974–5
1983–4
2008-09 a
a) Area cultivated (bighas)
70
274
125
266
493
b) % of total cultivated area
5
17
6
12
24
c) Yield (kg/bigha)
11
26
103
130
186
d) Real Output Value/bigha 1
2
10
33
34
96
4. Bajra (Pearl Millet): Secondary Kharif crop, less resource intensive
a) Area cultivated (bighas)
644
638
610 (730)
137 (363)
208 (425)
b) % of total cultivated area
46
40
29
6
10 (21)
c) Yield (kg/bigha)
34
27
59
48
79 (54)
d) Real Output Value/bigha 1
10
12
20 (20)
12 (14)
16 (11)
a) Area cultivated (bighas)
391
430
463
886
214 (388)
b) % of total cultivated area
28
27
22
39
11 (19)
c) Yield (quintal/bigha)
n/a
n/a
21.3
12
31
d) Real Output Value/bigha 1
34
34
72
43
99
5. Sugarcane: Decline and Revival
1. Real values are obtained by deflating with price deflators based on the Consumer Price Index for Agricultural Labourers
(CPIAL) for Uttar Pradesh. All values are in 1960–1 rupees.
a. The figures in brackets show total figure including plots sown with mixed crops.
22
TENANCY IN PALANPUR: ALTHOUGH THE SHARE OF HOUSEHOLDS ENGAGED
IN TENANCY HAS DECLINED SINCE 1983, MORE THAN A THIRD OF TOTAL AREA
CULTIVATED IS UNDER SOME FORM OF TENANCY
Tenancy trends in Palanpur
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1957/8
1962/3
% Area under tenancy
1974/5
1983/4
2008/9
%Household in tenancy
23
CHANGING NATURE OF TENANCY: DECLINING SHARE OF
BATAI CONTRACTS
Distribution of tenanted land by type of contract
100
90
80
70
60
50
40
30
20
10
0
Batai
Chauthai
1974
1983
Peshgi
2009
24
SHARECROPPING IS “NOT INEFFICIENT”
Productivity Differences between share cropped and non share cropped plots
Rabi 2009
Kharif 2008
VARIABLES
Productivity
Productivity
Sharecropping dummy
-59.38
-179.96
(s.e.)
(-744.48)
(-305.07)
Observations
145
128
we use the following specification for a simple comparison
R-squared
0.75 of means:
0.56
𝑦𝑐𝑖𝑗𝑘 = 𝑎𝑜 + 𝑎1 ∗ 𝑠ℎ𝑎𝑟𝑒𝑐𝑖𝑗𝑘 + 𝑎2 ∗ 𝑎𝑟𝑒𝑎𝑐𝑖𝑗𝑘 + 𝛿𝑗 + 𝜏𝑐 + 𝜔𝑘 + 𝜖𝑐𝑖𝑗𝑘
Robust standard errors
in parentheses.(***p<0.1;**p<0.05;***p< 0.01). Clustering is
where 𝑦𝑐𝑖𝑗𝑘 is profit per bigha for plot i at location k in the village where household j grows crop c. share is
done at
the household
level.
Additional
area,
crop fixed
a dummy
variable that takes
value
1 if the land iscontrols:
leased in oneffective
sharecropping,
0 otherwise.
area iseffects,
the
effective
of the plot,
for the fact
thateffects
some plots are joint cropped. τ is crop fixed effect, ω is
location
fixedarea
effects
andadjusting
household
fixed
location fixed effect and δ is the household fixed effect.
25
NON-FARM HAS EMERGED AS NEW DRIVER OF CHANGE IN THE
VILLAGE
26
OCCUPATION PATTERN IN PALANPUR: 1958-2015
1957/ 1962/ 1974/ 1983/
2008/
8
3
5
4
1993 9
2015
student
1
7
4
10
30
40
22
None
Cultivation &
Livestock
Casual
labour(Farm)
Casual
labour(Non-farm)
Regular
Employment
Self-Employment
(Non-Farm)
7
19
23
20
29
20
63
130
135
137
141
188
128
113
21
3
7
11
17
6
4
0
2
0
24
28
85
116
7
13
44
60
33
49
43
6
6
5
23
21
67
69
172
185
220
289
346
395
430
Total
27
Share of Income from Non-Farm Sources 1983/84 and 2008/09
Number of Households
Per Capita Income (1960/1 Rs.)
Share of Income from Non-Farm
Sources (average share across
households per caste)
1983/4
2008/9
1983/4
2008/9
1983/4
2008/9
Thakur
30
56
200
488
32%
67%
Murao
27
58
231
430
14%
35%
Dhimar
13
18
181
262
51%
60%
Gadariya
12
16
202
533
41%
63%
Dhobi
4
8
159
141
2%
30%
Teli
16
21
147
421
47%
60%
Passi
14
6
218
370
69%
55%
Jatab
19
38
85
180
17%
40%
Other
8
9
185
396
58%
52%
Total
143
230
194
382
34%
52%
THE ALL INDIA STORY:
POWERFUL STRUCTURAL TRANSFORMATION IN RURAL
AREAS IN LAST TWO DECADES
• Rising rural prosperity through faster agricultural growth and faster
growth of wages.
• Shift of workforce away from agriculture (after years of stagnation in
workforce structure).
• Most new non-farm jobs are casual and increasingly in construction
sector.
• Greater accessibility of non-farm jobs in recent years by those from
bottom quintiles, lesser educated and marginalised groups.
• Opening up of villages, markets, connectivity and communication.
• Increased mobility of people.
• Changing village institutions and politics.
• Palanpur broad trends or “stylised facts” consistent with those for
India.
29
1955-56
1958-59
1961-62
1964-65
1967-68
1970-71
1973-74
1976-77
1979-80
1982-83
1985-86
1988-89
1991-92
1994-95
1997-98
2000-01
2003-04
2006-07
2009-10
2012-13
ANNUAL GROWTH RATE OF GDP (5-YEAR MOVING AVERAGE)
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
GDP has grown at more than 5% since the mid-1980s.
30
REAL WAGES (RURAL MEN) (2004-05 PRICES)
90
80
70
60
50
30
1980…
1981…
1982…
1983…
1984…
1985…
1986…
1987…
1988…
1989…
1990…
1991…
1992…
1993…
1994…
1995…
1996…
1997…
1998…
1999…
2000…
2001…
2002…
2003…
2004…
2005…
2006…
2007…
2008…
2009…
2010…
2011…
2012…
40
Rural areas benefitted from an acceleration in growth rate of wages. Rural real wages increased at more than 6% per annum
between 2008 and 2013.
31
4.0
AVERAGE ANNUAL GROWTH RATES OF AGRICULTURE GDP
3.4
3.5
3.0
2.5
3.0
3.0
2.8
2.3
2.0
1.5
1.5
1.6
1.0
0.5
0.0
1950-60 1960-70 1970-80 1980-90 1990-00 1999-05 2005-10
Revival of agricultural growth rates in the later part of last decade.
32
Faster structural transformation, as workers are
shifting out of agriculture
% workforce in farm or non-farm
(% annual growth in farm or nonfarm employment)
100.0
8.0%
6.0%
80.0
4.0%
60.0
2.0%
40.0
0.0%
83 to 93
93 to 99
99 to 04
04 to 09
09 to 11
20.0
-2.0%
0.0
1983
1993-94
1999-00
Farm
2004-05
Non-Farm
2009-10
2011-12
-4.0%
Farm
Non-Farm
For the first time, absolute numbers of agriculturalists (cultivators and wage labor) started
declining. Shifts are sharper for women.
11
THE MAJOR DRIVER OF RURAL NON-FARM
EMPLOYMENT IS NOW THE CONSTRUCTION SECTOR
Share of major industry groups in total non-farm employment
(Rural)
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Manufacturing
Construction
1983
Trade, Hotel etc
1993-94
2004-05
Transport &
communication
Social Services
2011-12
34
Distributional outcomes and wellbeing
in Palanpur: 1957/8-2008/9
•
•
•
•
•
•
Average income
Poverty
Income inequality
Social mobility
Intergenerational income mobility
Human Development outcomes
Real Incomes and Poverty in Palanpur, 1957-2008
1957-8
1962-3
1974-5
1983-4
2008-9
Per Capita Income at current prices 173
(Rs/year)
149
1039
1025
11827
Index of per-capita income at 100
current prices
86
602
594
6836
Real per capita income at 1960-1 190
pricesb
211
265
238
412
54
52
11
13
34
40
20
23
Poverty
(Rs15 per day in 1960/1 prices)
% Population Poor
% Households Poor
47
45
Multidimensional Poverty: observed means
• In Palanpur study income is default indicator of
wellbeing
• Lanjouw and Stern (1991, 1998) introduce notion of
“observed means”
– Households are ranked by “apparent prosperity” where
living standards are assessed on the basis of a spectrum of
dimensions and criteria
• Wealth, intra-household distribution, health, education, etc.
– Judgments derive from close knowledge and familiarity
with villagers’ circumstances
– Rankings based on independent assessments across
multiple investigators and then reconciled
• Do income and observed means rankings agree?
Observed Means Classification:
1983/4
• Procedure:
– All households divided into 7 groups:
very poor; poor; modest; secure; prosperous;
rich and very rich.
– Exercise undertaken independently by Jean Dreze and
Naresh Sharma.
• Residents investigators over period of 15 months.
– Only prior agreement was on the numbers of households
per group (not the same per group).
Classification of Households by Observed Means
Naresh
Sharma
Very Poor
Poor
Modest
Secure
Prosperous
Rich
Very Rich
Jean
Drèze
Very Poor
••
••
••
•
•
Poor
•
•
•
•••
••
Modest
•
• (705)
••
••
••••••
••
••••••
•
••••••
•• • • •
•• •• •• •• • •
•• • • •
•••
•••
•••
••
•
• (226)
••••••
••••••
••••••
•••
••
••
•
•
••••
••••
••••••
••••••
•••••
•
•
Rich
•
•
•
•
•
•
Very Rich
•
•
•••••
••••
Secure
Prosperous
Observed Means Classification:
1983/84
• Procedure, continued:
– As many as 135 out of 143 were in identical or adjacent
categories by Dreze and Sharma (‘triangulation’).
– Remaining ambiguities could be resolved, more or less, by
close examination.
– Final stage is to re-classify these households into fractiles
of equal size (approx. deciles)
– This was done by Dreze.
• Compare observed means classification with
per-capita income
Per-Capita Income and Observed Means (1983/84)
p.c.
income
poorest
2
3
4
5
6
7
8
9
richest
Obs.
means
••••
•••
•••
••
•
•
•
2
••
•
••
•
••
•
••
•
•
3
•
••
•
••
•
•
•
••
•
•
•
4
•
•
•
•
•
•
•
•
•
••
•
5
•
•
••
••
•
•
•
••
••
•
•
•
••
••
•
•
•
••
••
•
•
•
••
•
•
•
••
•
••
•
•
•
•
•
•
•
•
•••
••
••
••
•
•
•
••
•
•
•••
•••
Poorest
••
••
6
7
• (122)
8
•
•
•
•
•
9
Richest
•
•
•
• (609)
•
•
•
•
Per Capita Income Classification of Palanpur Households by Caste in 1983/4
Per Capita Income Classification of Palanpur Households by Caste in 2008/9
Very Poor
Poor
Secure
Prosperous
Rich
%
(No. of hhs)
Thakur
0.075
0.207
0.264
0.264
0.189
1.00
(56)
Murao
0.217
0.239
0.217
0.174
0.152
1.00
(58)
Jatab
0.520
0.080
0.200
0.080
0.120
1.00
(38)
% of households
20%
20%
20%
20%
20%
(230)
100%
Observed Means Classification of Palanpur Households by Caste in 1983/4
Very Poor
Poor
Secure
Prosperous
Rich
%
(No. of hhs)
Thakur
0.0
0.267
0.233
0.267
0.233
1.00
(30)
Murao
0.0
0
0.222
0.370
0.407
1.00
(27)
Jatab
0.737
0.158
0.105
0.0
0.0
1.00
(19)
% of households
22%
19%
20%
19%
20%
(143)
100%
Observed Means Classification of Palanpur Households by Caste in 2008/9
Very Poor
Poor
Secure
Prosperous
Rich
%
(No. of hhs)
Thakur
0.052
0.121
0.345
0.259
0.224
1.00
(56)
Murao
0.036
0.200
0.400
0.182
0.182
1.00
(58)
Jatab
0.077
0.436
0.410
0.077
0.0
1.00
(38)
% of households
8%
23%
37%
19%
13%
(230)
100%
Inequality Trends
Inequality of Individual Incomes
1957-8
1962-3
1974-5
1983-4
2008-9
Gini Coefficient
0.336
0.353
0.272
0.310
0.379
Coefficient of Variation
0.650
0.755
0.530
0.578
0.769
e=1
0.173
0.191
0.137
0.170
0.229
e=2
0.319
0.344
0.206
0.366
0.444
No. of observations
529
585
750
977
1255
No. of households
100
106
112
143
233
0
0
5(1)
8(3)
37(12)
Atkinson Index
No. of
individuals(households)
with missing incomes
Inequality Decomposition by Income sources (Gini Coefficient)
Year
Source Gini Cultivation Income
1957-8
0.468
1962-3
0.475
1974-5
0.434
1983-4
0.529
2008-9
0.499
Non farm Income
0.825
0.836
0.685
0.598
0.645
Other sources
0.539
0.576
0.450
0.510
0.598
Total
0.336
0.354
0.272
0.310
0.379
Share of total
Income Cultivation Income
1957-8
0.585
1962-3
0.567
1974-5
0.584
1983-4
0.499
2008-9
0.300
Non farm Income
0.133
0.175
0.170
0.317
0.464
Other sources
0.282
0.258
0.246
0.185
0.236
Total
1
1
1
1
1
Contribution to
overall Gini
coefficient Cultivation Income
1957-8
0.639
1962-3
0.550
1974-5
0.766
1983-4
0.639
2008-9
0.197
Non farm Income
0.087
0.192
0.037
0.229
0.584
Other sources
0.274
0.258
0.198
0.133
0.219
Total
1
1
1
1
1
Contribution to inequality of caste
differences has declined in recent years
Inequality in Palanpur and all-India
• Puzzle: In India rising inequality is much
discussed, but aggregate inequality is rather
stable
– Rural Gini rose from 0.271 to 0.284 between 1983
and 2009/10 (Himanshu, 2015)
• In Palanpur Gini coefficient rose from 0.310 to
0.379 during this period
• Can the all-India and the Palanpur pictures be
reconciled?
Reconciling estimated inequality trends
1. All-India estimates are based on consumption, while Palanpur
estimates are based in income
–
No presumption that trend should be identical
2. Popular impressions of inequality could be based on concept of
absolute inequality while conventional measures are based on
relative inequality (Ravallion, Science 2014)
3. It is perfectly consistent for inequality within India’s ½ million
or so villages to be rising, while aggregate rural inequality
shows no change.
–
Process akin to that underway for global inequality (Milanovic, 2011)
Village studies can capture inequality trends that
are pertinent, but difficult to discern with
conventional data
Rising intra-generational mobility
Rising intra-generational mobility, cont.
Intra- versus Inter-generational
mobility
• Mobility analysis suggests that there has been
some increase in income mobility
• Mobility in Palanpur displays interesting patterns
along caste-lines.
– Rise of Jatabs (historically disadvantaged caste)
– Decline of Muraos (historical cultivating caste)
• Analysis across generations suggests possibility of
declining inter-generational mobility
– “Gatsby” Curve: higher inequality is associated with
lower intergenerational mobility (Krueger, 2012)
Palanpur: Declining Intergenerational
Mobility
HUMAN DEVELOPMENT OUTCOMES:
EDUCATION
• Increase in households choosing to educate their children in last
25 years.
• Literacy rate has doubled - 23% in 1990s to over 50% in 2009.
– Increase in literacy rate of Muslims (Dhobi and Teli).
–
Increase in literacy rate of Murao females.
• Improvement in literacy rates and enrolment ratio of children
aged 7-18 across social groups and gender.
• Modest improvements in education of Jatab and Muslim boys,
albeit lower than that of other social groups.
• No Jatab girl has completed primary education.
• However, major improvements in enrolment of girls among all
socio-economic groups since 1993.
• Only one government primary school but private schools are
opening up nearby.
56
HUMAN DEVELOPMENT OUTCOMES:
HEALTH
• Health facilities have increased but quality concerns remain.
• Malnutrition among children is higher than state average.
• Nutritional status of children and adults has improved.
• However, caste-based inequalities in child nutritional status
persist: Jatabs continue to have high malnourishment while
Muslim groups (Telis and Dhobis) have seen improvements.
• Vaccination among infants has improved.
• There is vulnerability to health shocks and high out-of-pocket
expenditure.
57
WOMEN IN PALANPUR
• Women are still largely invisible in the village economy
outside the home.
• Restricted mobility.
• High gender gaps in education and employment remain.
• The large recent increase in education gives the hope that
there might be a change in the situation in the next 10-15
years.
• The status of women in Palanpur has to be understood in the
larger socio-political-cultural context of Uttar Pradesh.
58
What are relevant lessons from
Palanpur for Development Economics?
• The role of longitudinal field studies
– A long tradition of village studies in India
• Himanshu, Jha and Rogers (2016), Jayaraman and Lanjouw
(1999)
– Pankaj Mishra: travel through India’s small towns
• Small towns are “statistically invisible” in surveys
– Easterly, Freschi, and Pennings (2015): “A Long History of
a Short Block: Four Centuries of Development Surprises
on a Single Stretch of a New York City Street”
• economic development of a NYC block over four centuries.
• Complexity, non-linearity and idiosyncracy of “development” in
even a single NYC block, cautions against feasibility of planning at
the aggregate level.
Lessons for the analysis of welfare trends
• Income and observed means
– Village studies to help think through meaning of economic
wellbeing and of multidimensionality
• The village as unit of analysis
– Aggregate level inequality analysis can mask the more
pertinent trends.
– Is inequality at the village level as stable as at the national
level?
• Intra- versus inter-generational mobility
– Longitudinal analysis to capture important dimensions of
welfare dynamics
– Is rising inequality occurring at the expense of falling
inequality of opportunity (declining intergenerational
mobility)?
LESSONS FOR STUDY OF GROWTH
• Lewis/Kuznets and standard dual economy models provide insights
helpful on role of sectors outside traditional agriculture but
potentially misleading on nature of process of how activities
change.
 Commuting versus migration.
 Mixture of activities on-farm and off-farm not zero-one transfer from one to
the other.
 Importance of investments and capital and technical progress within
agriculture.
 Importance of information flows and local organisation in pace, nature and
distribution of new activities.
 Informal is normal. Avoid bias both in understanding and policy.
• Points to stronger focus on how opportunities arise and how they
are taken. Differentials in entrepreneurship, influence of
institutions and communications, functioning of politics…
61
LESSONS FOR STUDY OF AGRICULTURE
• Markets for services of land and of labour are active and fairly
competitive.
• Behaviour broadly consistent with rational approaches to uncertainty
(cf 1982 Bliss/Stern book).
• But constraints are still important: working for those judged lower in
social scale; women for most caste groups have very limited scope.
• Information, observation, trust. Preferences for leasing out within
caste if possible. Movement to peshgi and chautai as outside activity
increases.
• Still no productivity differences between share-cropping and own
cultivation.
• Importance of investment and increasing capital as land ownership
62
per capita declines and outside opportunities take up time.
LESSONS FOR STUDY OF INSTITUTIONS
• Powerful influence on investment and functioning of markets.
– Zamindari abolition encourages investment in land.
– Lower groups could not lease in draught animals and therefore not land.
Now markets for tractor services.
– Within group trust influences land and credit markets.
• Institutions are endogenous
– Bargaining power and group organisation of Jatabs within village
influenced by availability of outside jobs.
– Nature of tenancy contracts influenced by outside jobs and reduction of
ability to supervise.
– Communications and awareness of outside world influences social
relations and market functioning.
63
LESSONS FOR STUDY OF SOCIETY
• Public institutions, including for health and education, have
performed poorly in Palanpur. Why has social pressure been
weak? Inequality, public administration in UP, role of women…?
• Position of girls and women still weak. Will this change with
communications, integration with outside world, education…?
• Politics still problematic and corrupt but there can be real
change. For example, reservation of Pradhan for caste and
gender has had some influence. Pradhan was “impeached”
when behaviour became egregious.
• Nature of village society likely to change as migration accelerates.
Village increasingly a residential entity. Picture of village as
“closed economy and society” long out-dated.
64