Songqing Jin – Michigan State University Klaus Deininger – World Bank Operation Barga and beyond: Long-term implications and sustainability of land reform in West Bengal Songqing Jin – Michigan State University Klaus Deininger – World Bank

Components of land Reform in India Abolition of intermediaries: largely done after independence Implemented swiftly and successfully Ceiling legislation: Record of implementation mixed Force owners to dispose of all the land that is beyond the ceiling amount Difficult, slow, preventive subdivision Tenancy reforms: Rent ceilings & tenancy rights Increase tenure security for sitting tenants by registering them Can’t be evicted as long as they pay rent Limits on the amount to be paid Sublease is not allowed Proactive implementation needed to prevent tenant evictions Land reform in West Bengal Largest land reform effort in India (3.5 mn. beneficiaries total) Generally considered very successful But: Little study of long-term impact

Study objectives and data Surprisingly few studies of the topic Focus on aggregate level Short-term results only – little study of asset accumulation No discussion of cost or whether scope for improvement Objectives of this study Long-term impacts on asset (land) accumulation Human capital formation across generations Sustainability of land reform benefits Data (first part of a longer-term study) Complete listing of 200 villages (95,000 hhs) in West Bengal Initial and current household characteristics Land market participation (with partner matching) Both types of land reform beneficiaries (ceiling & tenancy) To be followed by survey to assess efficiency & market implications 5

Descriptive findings Targeting of beneficiaries Poverty impact Well-targeted towards landless and wage workers/tenants Low caste Difference between ceilings and tenancy reform Poverty impact Income per capita not significantly different from average Somewhat lower productivity than average Not clear whether sample selection/change from earlier Increase in human capital accumulation Land market participation Higher levels of land rental and sales market participation Especially for bargadars 5

Impact of Land Reform on educational change

Impact of Land Reform on educational change

Productivity of Reform Land versus Own Land

Price Differences between Own and Barga Land Robust t statistics in parentheses; * significant at 5%; ** significant at 1%; District dummies are included throughout; Districts, time dummies and their interaction terms are included in column (2) and (4); Cluster at village level is controlled

Conclusion and implications Positive impact on human capital accumulation Particularly for those who had been landless Permanent rights have more impact Helped the poorest to catch up faster with average Marshallian inefficiency clearly visible Making tenancy rights permanent may have productivity in short run … but is not the most efficient long-term arrangement Ways to give ownership rather than tenancy rights to be considered Follow-up research will help to clarify More precise estimate of education effect (all offspring) Estimating second-generation allocative inefficiency Magnitude of bargadar inefficiency; potential benefits from giving ownership Whether higher out-migration by beneficiaries’ off-spring Implication Land reform can be a key instrument for poverty reduction But the way it is implemented matters a lot Looking at short term impacts may only tell part of the story 5