LAND, POVERTY, AND GROWTH: INDIA
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then we would not expect to see such effects on urban poverty.
There is no good reason to think production and distribution
decisions in the urban sector would be affected (apart from some
complex general equilibrium reasons). This is confirmed in col-
umn (5) of Table III which finds no significant negative association
between land reform and urban poverty as measured by the same
NSS data. This adds credence to the idea that our land reform
variable is picking up something peculiar to the rural sector.
Columns (6)–(8) use the difference between rural and urban
poverty as the left-hand-side variable. As we observed from
column (5), urban poverty does not respond to land reform. This
helps to control for any omitted variables that have common
effects on poverty in both places.10 Column (6) confirms our finding
that aggregate cumulative land reforms lagged four periods are
negatively associated with a reduction in rural-urban poverty
difference. Results broken out by type of land reform are consis-
tent with those for rural poverty: tenancy reforms and the
abolition of intermediaries have had a significant impact in
closing rural-urban poverty gap while the impact of the other two
types of land reform are insignificant (column (7)). Using the gap
between rural and urban head-count index yields similar findings
(column (8)).
Taken together, these results demonstrate a consistent pic-
ture.11 Land reform in general appears to be associated with
reductions in rural poverty, with these effects most strongly
10. Unlike poverty levels, it is also a variable that does not trend downward
overtime. In the levels regression the cumulative nature of our land reform
variable makes it difficult to identify its effect separately from a state-specific time
trend. Indeed, including state-specific time trends as regressors in a poverty levels
regression leads to the land reform variable becoming less significant. However,
when the poverty difference is included as the left-hand-side variable, the effect
of land reforms remains significant even when state-specific time trends are
included.
11. These results assume that the effects of each land reform work indepen-
dently from one another. To reflect the possibility that packaging of certain reforms
is important, we ran our basic specifications including interactions between the
different types of land reforms. No general pattern emerges from this exercise,
although there is some suggestive evidence that undertaking both tenancy reform
and abolition of intermediaries together enhances the impact of land reform
further. However, this finding is somewhat sensitive to the exact measure of
poverty used and the inclusion of particular control variables. We also considered
whether there was a difference between land reforms enacted recently compared
with those more than ten years ago. To this end, we reran the main results
separating out a variable cumulating recent land reforms and those more than ten
years old. We found that both enter negatively and significantly in the poverty
regressions, with the older land reforms frequently taking an (absolutely) large
coefficient. Following Moene [1992], we also investigated whether land reforms in
more densely populated states appeared to have a larger impact on poverty. For
most of the specifications that we looked at, this was indeed the case.