Came across two new papers. One of them is a contribution to the growing literature on political economy of land reforms or redistribution. The other one is on the economic contribution of the huge railway network that the British built in India.
1. Bardhan, Pranab, and Dilip Mookherjee. 2010. “Determinants of Redistributive Politics: An Empirical Analysis of Land Reforms in West Bengal, India.” American Economic Review, 100(4): 1572–1600.
We investigate political determinants of land reform implementation in the Indian state of West Bengal. Using a village panel spanning 1974-1998, we do not find evidence supporting the hypothesis that land reforms were positively and monotonically related to control of local governments by a Left Front coalition vis-à-vis the right-centrist Congress party, combined with lack of commitment to policy platforms. Instead, the evidence is consistent with a quasi-Downsian theory stressing the role of opportunism (reelection concerns) and electoral competition. (JEL D72, O13, O17, Q15)
2. Donaldson Dave (2010), Railroads of the Raj: Estimating the Impact of Transportation Infrastructure, NBER Working Paper no. 16487.
How large are the benefits of transportation infrastructure projects, and what explains these benefits? To shed new light on these questions, this paper uses archival data from colonial India to investigate the impact of India’s vast railroad network. Guided by four predictions from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) increased real income levels; and (4), that a sufficient statistic for the effect of railroads on welfare in the model (an effect that is purely due to newly exploited gains from trade) accounts for virtually all of the observed reduced-form impact of railroads on real income in the data. I find no spurious effects from over 40,000 km of lines that were approved but – for four different reasons – were never built.