Operation Barga and beyond Long-term implications and by oft14212

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									 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
                 Descriptive findings

• Targeting of beneficiaries
   – 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
   Impact of Land Reform on educational change
                              (1)        (2)         (3)       (4)
Barga beneficiary           0.387      0.387       0.305     0.383
                           (2.96)**   (2.96)**    (2.38)*   (2.94)**
Patta beneficiary           1.201      1.203       0.854     1.186
                           (7.64)**   (7.64)**   (5.29)**   (7.62)**
Male child                             -0.087      -0.101    -0.089
                                       (1.71)     (2.00)*    (1.73)
Area owned in 1978                                 -0.221
                                                 (3.83)**
Number of buffalos in 78                           -0.108
                                                 (5.24)**
Area owned now                                              -0.035
                                                            (1.68)
Number of buffalos owned                                    -0.011
                                                            (0.62)
Number of Children                                0.013     0.001
                                                  (0.45)    (0.02)
Observations                48871      48871      48871     48871
R-squared                    0.24       0.24       0.27      0.24
Impact of Land Reform on educational change
                                    (1)        (2)        (3)        (4)
Barga beneficiary                -0.103     -0.102      0.074     -0.092
                                  (0.67)     (0.66)     (0.47)     (0.60)
Patta beneficiary                 0.900      0.902      0.909      0.896
                                (5.72)**   (5.73)**   (5.90)**   (5.64)**
Barga beneficiary×78 landless     0.970      0.970      0.458      0.938
                                (5.15)**   (5.16)**    (2.07)*   (5.02)**
Patta beneficiary×78 landless     0.427      0.427     -0.073      0.412
                                 (2.22)*    (2.21)*     (0.34)    (2.12)*
Male Child                                  -0.088     -0.101     -0.089
                                             (1.71)    (2.00)*     (1.74)
Area owned in 1978                                     -0.219
                                                      (3.80)**
Number of buffalos in 78                               -0.108
                                                      (5.31)**
Area owned now                                                   -0.034
                                                                 (1.68)
Number of buffalos owned                                         -0.009
                                                                 (0.51)
Number of children                                     0.013      0.002
                                                       (0.47)    (0.07)
Observations                     48871      48871      48871     48871
R-squared                         0.24       0.24       0.27       0.24
Productivity of Reform Land versus Own Land
                                           (1)         (2)         (3)         (4)
Current Bargadas                         -0.136
                                        (6.63)**
current Pattadas                         -0.195
                                        (7.72)**
Share of Barga land in total area                     -0.211      -0.212      -0.328
                                                     (7.74)**    (4.00)**    (4.08)**
Share of Patta land in total area                     -0.254      -0.346      -0.512
                                                     (7.00)**    (5.18)**    (4.45)**
Share of irrigated area in total area      0.210       0.207       0.177       0.316
                                         (3.51)**    (3.45)**     (2.11)*    (2.86)**
Years of education of head                 0.007       0.007       0.010       0.006
                                         (4.52)**    (4.41)**    (3.09)**      (1.56)
Head's age                                 0.001       0.001       0.001       0.000
                                          (1.68)      (1.66)       (1.88)      (0.15)
Total area cultivated (log)                0.700       0.690       0.598       0.684
                                        (46.07)**   (44.22)**   (19.69)**   (18.04)**
Household size (log)                       0.087       0.086       0.079       0.069
                                         (7.13)**    (7.00)**    (4.09)**     (2.27)*
Own buffalo/cow                           -0.063      -0.067      -0.069      -0.106
                                         (2.76)**    (2.93)**     (2.41)*    (3.00)**
ST/SC caste                               -0.072      -0.068      -0.012       0.000
                                         (2.99)**    (2.76)**      (0.38)      (0.01)
Observations                              40091       40091        11921        5501
R-squared                                   0.59        0.59        0.55        0.53
          Price Differences between Own and Barga Land
                                                          (1)              (2)                 (3)        (4)
Land Size (log)                                         -0.102           -0.098              -0.119     -0.114
                                                      (4.76)**         (4.58)**            (6.18)**   (5.97)**
Partners from own village                               0.057            0.057               0.020      0.016
                                                       (2.03)*          (2.13)*              (0.87)     (0.72)
Barga Land                                   (α)        -0.147           -0.133              -0.086     -0.068
                                                      (2.91)**         (2.76)**              (1.33)     (1.08)
Barga land*dummy for land purchase (β)                                                       -0.015     -0.027
                                                                                             (0.35)     (0.65)
Irrigated Area                                         0.380            0.357                0.372      0.356
                                                      (5.67)**         (5.78)**            (5.75)**   (6.00)**
Test for α+ β=0                                                                              -0.101     -0.095
                                                                                            (2.06)*    (1.98)*
Observations                                           14342            14342                22742      22742
R-squared                                               0.20             0.24                 0.21       0.23

 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

								
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