Long Run Effects of Colonial Education Policy?
Latika Chaudhary
Scripps College
1030 Columbia Avenue
Claremont, CA 91711
latika.chaudhary@scrippscollege.edu
Manuj Garg
Stanford University
579 Serra Mall
Stanford, CA 94305
manuj@stanford.edu
PRELIMINARY AND INCOMPLETE. PLEASE DO NOT CITE.
Version: June 2010
Abstract
Although marked differences in literacy across different states of India are well documented, the
historical persistence of these regional patterns is less well known. This paper examines one
potential explanation for this persistence, namely colonial public investments on primary
education. Although OLS estimates suggest a strong and persistence effect of colonial spending
on educational outcomes across 147 districts of former British India, IV estimates find colonial
spending to be a significant determinant of outcomes only until the 1970s. The effects of
historical spending are relatively short lived in the Indian context because of an effective
government campaign beginning in the 1970s to reduce inequalities in the provision of public
services.
1. Introduction
Social scientists have long noted the tremendous heterogeneity in educational
performance across different states and regions of India.1 As of 2001, Kerala had achieved
almost universal literacy as compared to 47 percent in Bihar. Literacy among Scheduled Castes,
the traditionally marginalized lower castes, is above average in states such as Gujarat and
Maharashtra as compared to Orissa and Uttar Pradesh. Such differences, however, are not just a
recent phenomenon—as early as 1911, literacy in Bombay presidency, which roughly
corresponds to present-day Gujarat and Maharashtra, was almost twice as high as Bihar and
Orissa (6.9 as compared to 3.9 percent). Cochin and Travancore, which represent the
contemporary state of Kerala, were leaders in educational attainment with literacy rates of 15
percent as compared to the national average of 5.9 percent.2 Similar patterns are also discernable
at the district-level—Ahmedabad district in western India was among the top five literate
districts of British India in 1911 and continued to enjoy this position until 1991.
Such patterns are quite remarkable given the numerous changes that occurred over the
20th century in the Indian sub-continent for example, Indian independence in 1947, the partition
and creation of Pakistan and the relatively large public investments devoted to education in the
decades following independence. The role of history is thus critical to understanding why certain
states or districts of India have been partially unsuccessful in overcoming poor schooling
endowments. Are colonial public investments correlated with contemporary outcomes? If yes,
for how long does history continue to influence present day outcomes?
Using district-level data for the districts of former British India, this paper examines
whether colonial public investments on primary education continue to influence educational
1
Roy and Datta (1993), Drèze and Sen (1998), Probe Team (1999), Drèze and Kingdon (2001), ASER (2005),
Kingdon (2007), Pal and Ghosh (2007) among many others have commented on these patterns.
2
Ramachandran (1996) emphasizes the unique historical role of the state in contributing to Kerala’s success story.
1
outcomes between 1961 and 1991. This exercise complements and extends Chaudhary (2010),
where we find that colonial public investments had large and significant effects on male literacy
in the early 20th century. We focus on a particular measure of public investments, namely rural
district board expenditures, which account for the majority of public spending on primary
education at the district level.
For the empirical exercise, we merged district level information on public spending by
colonial district boards in 1911 to literacy and enrollment outcomes reported in the recent
censuses. In the cross-sectional OLS analysis, we also controlled for a variety of factors that may
bias the coefficients on 1911 public spending such as 1911 income, development and social
structure. The OLS coefficients indicate a large and positive effect of colonial investments on
rural literacy and primary school graduates. A 10 percent increase in 1911 public spending per
rural population is associated with a 3.2 percentage point increase in total rural literacy in 1961,
which increases to 4.7 percentage points in 1991. Moreover, we find no significant effects of
historical spending on control outcomes such as secondary school and higher graduates.
Despite the extensive set of controls, the OLS estimates may still be biased. To address
such concerns, we instrument for 1911 public spending using 1911 land revenues. According to
historical accounts, subjective forces unrelated to education created quasi-random variation in
revenue assessments conditional on observable differences in geography and development across
districts (Chaudhary 2010). Moreover, land revenues are statistically unrelated to available
measures of agricultural productivity between 1957 and 1987, corroborating the historical
accounts and providing some reassurance about the validity of the IV approach.
Unlike the OLS estimates, the IV estimates on colonial public spending are positive and
significant only for the 1961 and 1971 cross-sections, and in a few marginal cases for the 1981
2
cross-section. Colonial spending is statistically unrelated to 1991 literacy and enrollment
outcomes. A remarkable persistence in public investments between the pre- and postindependence period coupled with changing priorities in the 1970s can account for our findings.
In the decades immediately following independence, spending allocations were often based on
historical patterns perpetuating differences in spending inherited from the colonial era.3 But,
beginning in the 1970s, the universal provision of public goods became an important policy
objective of the central government following which there were massive increases in the level of
public goods in previously underserved areas (Banerjee and Somanathan 2007).
Broadly, this paper relates to a large and growing literature on the relationship between
history and economic development. Beginning with the seminal work of Engerman and Sokoloff
(1997) and Acemoglu, Johnson and Robinson (2001), researchers have used colonization as a
quasi-natural experiment investigating its impact on institutional development and hence
economic growth. While some of the earlier work focused on cross-country comparisons, recent
papers focus on within country analyses such as Banerjee and Iyer (2005), Dell (2008) and
Huillery (2009) and we share the same within country focus. Our paper is closest in spirit to
Huillery (2009) that examines the effects of early colonial investments on contemporary
outcomes in education, health and infrastructure in colonial West Africa finding large and
persistent effects of colonial investments on current outcomes. Thus, colonial investments and
institutions have had long run effects spanning many decades and centuries in some cases. But,
in the case of India the persistent effect of the long hand of history was cut short by policy
performs in the 1970s.
2. Regional Literacy Patterns
This section reviews literacy rates in pre- and post-independence India to illustrate the
3
See Tilak (1989) for details on education financing in the post-1947 era.
3
striking persistence in regional patterns of human capital development. The preindependence series are for the Indian sub-continent including Pakistan and Bangladesh with
regional data for the provinces of British India and the princely states that were under
indirect colonial control. The latter territories deferred to the British with regard to defense
and foreign policy, but were free to manage their internal administration including the
provision of education (see Map of British India and Princely States).
In comparison, the East India Company and the British Crown introduced a new state
system of education in British India in the 19th century and directly controlled education policy
from 1858 to 1919. After 1919 education was a transferred subject because of the MontagueChelmsford reforms, which devolved greater powers to elected Indian ministers at the provincelevel. Education became a provincial subject when provincial autonomy was introduced in 1935
and the status quo was maintained through independence with the classification of education as a
state subject until 1976 when it was moved to the concurrent list giving the central and state
governments joint authority over the provision of schooling.
Given the high costs of developing a mass education system, the colonial government
relied heavily on private sources of revenues through the grant-in-aid system, which provided
partial public subsidies to schools under private management that came to be known as aided
schools. In fact, the current set up of the Indian school system is a legacy of the colonial period
with privately managed aided and unaided schools functioning side-by-side with publicly funded
and managed government schools. Although the school system was kept intact, India
progressively targeted larger public resources toward education after Independence.
Table 1 shows the composition of education spending over the course of the 20th century
for British India and post-independence India. Unfortunately, the pre- and post-independence
4
series do not correspond to the same geographic area since the British India series exclude the
former princely states that are included in the post-1951 data, but include present day Pakistan
and Bangladesh that are not covered in the post-1951 data. Despite these anomalies, the broad
patterns suggest that public expenditures as a share of total educational expenditures increased
from 50 percent in 1901 to 85 percent in 1981 with large increases coming from central and state
governments. On account of such transfers, nominal per-capita education expenditures that were
among the lowest in the world at the turn of the century increased dramatically over this period.
Average literacy in the colonial period mirrored the low level of public investments with
less than 10 percent of the population recorded as literate in the early 20th century. Literacy was
incorrectly enumerated in the earlier colonial censuses but beginning in 1911 a uniform
definition of literacy was adopted—an individual was recorded as literate if she could read and
write a short letter to a friend in any language and census officials generally believed the
enumeration was conducted accurately in subsequent censuses. A similar definition of literacy
was adopted for the post-independence censuses and “a person who can both read and write with
understanding in any language is taken to be literate” although “a person who can merely read
but cannot write is not literate.” In both periods, there were no formal schooling requirements in
order to be recorded as literate.
Table 2 documents literacy in the colonial period for the provinces of British India and
the larger princely states. Average literacy remained fairly stagnant increasing from 6 percent in
1911 to 10 percent in 1931, but there is tremendous heterogeneity by region, gender and caste.
For example, 30 percent of the population in Cochin and Travancore states was literate in 1931
as compared to less than 6 percent in Bihar and Orissa. Literacy in Bengal, Bombay and Madras
was twice as high as in the Central Provinces and United Provinces. Female literacy was
5
extremely low averaging 3 percent in 1931 and the regional patterns strongly resemble those for
overall literacy. In addition to regional and gender variations, there are striking differences
across castes. Brahmans, the traditional elite caste of Hindus, were among the most educated
group in this period with male literacy rates as high as 80 percent in Madras. In comparison, the
extent of education was very low among socially marginalized groups such as the lower castes
and aboriginal tribes.
Although India made important strides in increasing access to schooling in the postindependence period, regional patterns of inequality continue to persist as seen in table 3. In
1991 overall literacy was just over 50 percent with substantial variation across Indian states that
represent the former provinces of British India as well as the princely states incorporated into
independent India. Given the numerous changes in boundaries, the states of 1991 do not
correspond to the provinces of 1931. Although table 3 lists the historic regions that roughly
correspond to the contemporary Indian states, these broad patterns should be viewed as merely
illustrative particularly for Punjab and Bengal since Pakistan and Bangladesh were roughly
carved from these provinces.
With these caveats in mind, table 3 strongly suggests that regions with higher literacy in
1991 had higher literacy in the colonial period as well. The southern state of Kerala, which
represents the former states of Cochin and Travancore, is close to achieving universal literacy,
while less than 40 percent of the population of Bihar is literate. Schedules castes (former lower
castes) of Gujarat and Maharashtra are more literate than the average population of West Bengal
and Assam. Literacy in Madhya Pradesh and Uttar Pradesh continues to lag behind the Indian
average just as it did 60 years ago. This persistence is quite remarkable given the increase in
literacy over this period and the numerous development programs embraced by the Indian
6
government after independence. Since colonial public investments on primary schooling had a
significant effect on increasing literacy in the colonial period (Chaudhary 2010), we examine
whether colonial investments can explain any of the observed variation in literacy across districts
of modern India.
3. Colonial Public Investments on Education
Although the Crown via the Government of India directly controlled education policy
from 1858 to 1919, the public financing and management of schools was decentralized to
provincial governments beginning in the 1870’s. Primary education and other local services such
as infrastructure were further decentralized to rural district and urban municipal boards in the
1880s. Due to data constraints, we focus on 1911 public education spending by these rural
district boards as our measure of colonial public investments. Data on rural district board
spending is available for majority of the districts of British India, while district level data on
public spending by provincial governments and urban boards are unreported for many districts.
Rural district boards were set up in the early 1880s following the 1882 Resolution of
Local Self-Government, which called for the establishment of rural district boards, sub-district
boards (where possible), and urban municipalities with up to a two-third majority of non-official
members (Indians) that were either elected or nominated by British district officers. The
resolution emphasized the importance of elected non-official members and board chairmen
where possible, but provincial governments were given substantial leeway in interpreting the
resolution and developing district councils to suit local conditions. In practice, British officials
were board chairmen assisted by landed Indian elites and other members of the upper castes
(Tinker 1968).
These rural boards were entrusted with the provision of primary schooling, local
7
infrastructure (civil works), and medical services with 80 percent of expenditures allocated
between schooling and infrastructure. With regard to primary schooling, the boards served two
key functions. They directly managed a few schools of high quality and provided public
subsidies to schools that were privately managed (aided schools). Provincial education
departments exercised some control over management, while the boards frequently voted on the
necessary funds and decided on the location and general nature of the schools. All the money
was distributed in rural areas where almost 90 percent of the population lived.
The land cess, an additional levy upon the existing land tax revenue, was the key source
of revenue for the colonial boards. Similar to the land revenue, the rate of taxation varied across
provinces averaging 6 percent, but was generally uniform across districts within the same
province. Provincial governments administered the cess and the boards had no financial
autonomy to raise revenues by increasing the rates of taxation. Provincial grants to districts
accounted for another 25 percent of board income, while tolls on roads and ferries contributed 10
percent. School fees, income from cattle pounds, and private contributions made up the rest of
the revenue sources.
To gauge the relative importance of these public investments, table 4 reports district
board expenditures as a percentage of total educational spending, primary school spending and
public primary school spending in 1912-13 for British India and the larger provinces. On
average, district councils accounted for 15 percent of total spending, 49 percent of primary
education spending and 65 percent of public spending on primary education. The local boards,
thus, represent an important source of rural primary education spending although they do
underestimate total public spending on primary education.
8
Average spending by district boards was 3.5 pounds per 1,000 people representing less
than 0.5 percent of per-capita GDP in 1912-13. Public spending did increase over time, but
always remained under 1 percent of per-capita GDP until Indian independence. Besides the low
level, table 1 also highlights the significant heterogeneity within British India with Bombay
outspending Bihar and Orissa by a factor of ten. Spending also varied across districts within the
same province: for example, spending per-capita ranged from rupees 0.015 to 0.049 in Bihar and
Orissa. Differences in land revenues and the Land Settlement system were primarily responsible
for differences in spending (Chaudhary 2010).
The bottom panel of table 4 documents the relationship between spending and revenues.
In the 19th century, the cess represented 60 percent of district board revenues, but provincial
governments increased the amount of grants available to the boards in the early 1900s. By 192930 grants contributed to 43 percent of the revenues as compared to 36 percent from the cess.
Grants are included under ‘other sources’ in the bottom panel of table 1 and land revenues
determined to a large extent the variation in grants across provinces.
In Bengal and Bihar, land revenue was fixed in cash for perpetuity because of the
Permanent Settlement of 1793. Consequently, these areas were unable to recoup higher revenues
as agricultural productivity and prices increased over the next century and lost more public
money when land revenues were decentralized to provinces in the late 19th century. Because of
their low revenues, they transferred smaller grants to their districts. Land revenues were revised
every thirty years in Temporary Settlement areas such as Bombay and Madras. The revenues in
this case incorporated changes in agricultural conditions albeit at large intervals. Temporary
Settlement areas had larger public funds and hence more money to spend on grants.
Provinces allocated grants to districts on a per-capita basis and sometimes favored either
9
poorer (‘needy’) districts or those with larger minority populations. Although land revenues did
not influence grants within provinces, they contributed to differences in cess both across and
within provinces because the cess was just an additional tax on land revenues. Land revenues and
by extension the cess were related to the agricultural potential of a district. But, the whims and
idiosyncrasies of individual land settlement officials lead to substantial quasi-random variation in
revenues across districts and even within neighboring tracts of the same district.
Controlling for observable differences in soil, rainfall and the level of development,
Chaudhary (2010) uses land revenues to instrument for public education spending by the rural
boards and finds these investments had large and positive effects on the development of male
literacy in the colonial period. This paper extends the analysis to assess whether colonial
investments influenced educational outcomes such as literacy and enrollment in postindependence India.
4. Data
For the empirical analysis, we constructed a new historical dataset of 147 districts of
former British India in the current Indian states of Assam, Andhra Pradesh, Bihar, Gujarat,
Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Punjab, Tamil
Nadu, Uttar Pradesh and West Bengal (see attached Map of Indian States). The dataset merges
information from a variety of different sources including the colonial censuses, historical district
gazetteers, post-independence censuses, and the India Agricultural and Climate dataset
constructed by the World Bank.
Although state and province boundaries have changed substantially over the 20th century,
district boundaries have remained relatively stable over this period. For bigger districts that were
carved into smaller areas, we aggregated the data to correspond with the boundary of the older
10
district. In a few instances where there was a substantial transfer of territory between two or
three neighboring districts, we aggregated the data for the relevant districts to construct a ‘super
district’ that does not correspond to a specific administrative unit. Nonetheless, this ensures that
we are comparing the same geographic area over time.
The primary goal of the empirical exercise is to assess whether historical expenditures
continue to influence contemporary outcomes in India. Since district board spending could be
correlated with factors such as income and development that may influence both historical and
contemporary literacy, we used the 1911 colonial census to construct a historical measure of
development (i.e. population density). Moreover, we also constructed measures of the caste and
religious breakdown of the district such as the population share of Brahmans, Christians,
Buddhists, Muslims and lower castes. Since caste and religious heterogeneity is negatively
correlated with the supply of private schooling in this period (Chaudhary 2009), the analysis also
includes a herfindahl-based measure of caste and religious fragmentation in each district.
We used the colonial district gazetteers to construct a measure of income in the form of
income tax revenues collected in the district in 1911.4 Income taxes in this period were generally
collected from workers participating in the formal economy. The taxes were levied on a small
share of the population and capture the higher tail of the formal income distribution. We also
used the gazetteers to construct per-capita measures of public education spending by rural district
boards. As mentioned earlier, the gazetteers do not report total public education spending for all
the districts and hence we focus on rural board spending.
Finally, we extracted data on land revenues collected in each district in 1911. These
4
The colonial district gazetteers provide a unique source of data for the colonial period. They report a wealth of
information on district economic, demographic and social characteristics. Each district series has two parts, A and B:
part A describes the history, geography, culture, administration, and economic situation of the district, while part B
provides statistical tables to complement the discussion in part A.
11
revenues were an important determinant of historical public spending and offer a potential
instrument for district board spending. For districts in the United Provinces, the gazetteers do not
report the exact land revenues collected, but instead give the revenue demand or what districts
were expected to collect in specific years between 1905 and 1911. The reported year also varies
by district. Since the revenue demand was fixed for 20 to 30 years, the inconsistency in the
reporting year should not create any significant problems. There could in principle be differences
between revenue demand and revenue collected, but the regressions include geographic and
economic controls to address problems arising from such reporting differences.
Given the importance of geography to the computation of land revenues and education
spending, we used the India Agricultural and Climate Dataset prepared by the World Bank
(IACDS) to construct dummy variables for black, red and alluvial soil. We extracted districtlevel data on normal rainfall from the 1911 census and created a dummy for coastal districts
based on a visual inspection of historical maps from this period. Contemporary data on literacy
and enrollment are reported in the Indian District Database compiled from the 1961 to 1991
censuses. Using these data, we constructed measures of total literacy, rural literacy, rural literacy
in the population aged 10 to 19, rural primary school or higher graduates and rural secondary
school or higher graduates. I focus on rural outcomes because historical district board spending
was only allocated to rural areas of a district.
5. Results
4.1 OLS Results
We begin the empirical analysis by estimating the OLS relationship between spending in
1911 and contemporary educational outcomes such as literacy and enrollment in the postindependence period focusing on the census from 1961 to 1991. Omitted factors correlated with
12
both 1911 public spending and subsequent outcomes pose an important problem in this context
because1911 public spending was not randomly allocated across districts. If it is correlated with
historical levels of development, which in turn influence current levels of development and
hence current outcomes, then the coefficient on 1911 public spending will be biased and will
pick up the effect of omitted development.
To address such concerns, we introduce several control variables that may be correlated
with 1911 spending and contemporary outcomes. These variables fall into three categories:
geographic, social and development and other historical investments. Geographic controls
include dummies for red, black and alluvial soil, the normal rainfall in the district in 1911 and
the numbers of years between 1911 and the first year a railway line was constructed through the
district. The social and development controls include the 1911 population share of the various
caste and religious groups mentioned in the data section and a district-level measure of caste and
religious fragmentation, 1911 population density and 1911 income tax revenues per capita.
Public spending on primary education is also related to public spending on local
infrastructure and medical services incurred by the district boards. Because land revenues were
so important to board revenues, districts with higher levels of land revenues may have outspent
other districts in all categories of district board spending namely primary education, local
infrastructure and medical services. Since the provision of the latter services could independently
influence historical outcomes and in turn contemporary outcomes, we also include 1911 public
spending on infrastructure and medical services as controls. The public spending variables are
standardized per 1911 rural population because district boards focused on rural areas distinct
13
from the urban boards. Finally, all the regressions include state fixed effects to ensure we are
identifying variation within states as opposed to across states.5
Table 5a presents the first set of results on 1961 outcomes. Each number in the table is a
coefficient from an OLS regression of the log of 1911 public education spending per 1911 rural
population plus different controls. Each row focuses on a different dependent variable. Column 1
includes no controls, column 2 adds state fixed effects, column 3 adds geographic controls,
column 4 further adds social and development controls, and lastly column 5 adds the other
historical investments. Row 1 begins with the total literacy rate in the district and as seen in the
table, the coefficient on public spending is positive and statistically significant—a 10 percent
increase in 1911 public spending translates into a 4.3 percentage point increase in the 1961
literacy rate. The result is robust to the inclusion of additional controls although the coefficient in
only significant at the 10 percent level after adding all the controls in specification 5.
In principle, we expect the effects of district board spending to be perhaps more
accurately measured for rural educational outcomes given the rural nature of the boards. Hence,
row 2 focuses on the rural literacy rate. After including all the controls in specification 5, the
effects of district board spending are more precisely estimated for rural literacy and suggest that
a 10 percent increase in historic spending translated into a 3.2 percentage point increase in the
1961 rural literacy rate. Row 3 refines the measure of rural literacy to the population aged 10 to
19 in 1961, which are currently in school or recent graduates. The results are even more striking
– the magnitude of the coefficient is twice as large and statistically significant at the 1 percent
level (specification 5). Row 4 focuses on male rural literacy and the results are essentially
unchanged although the coefficient is less precisely estimated once we include all the controls.
5
The results are robust to using province fixed effects, which use the pre-1947 administrative divisions.
14
Rows 6 and 7 focus on enrollment outcomes as opposed to literacy. If the primary
channel linking historical investments to contemporary outcomes is via contemporary
investments, then we may expect stronger effects on primary school graduates than on literacy.
The census does not directly report enrollment, but rather the number of rural primary school
graduates and the number of secondary school graduates. In principle, 1911 district board
spending should be unrelated to secondary school graduates because these expenditures were
targeted to primary education. Hence, secondary school graduates offer a quasi-control outcome.
The coefficient on colonial public spending is positive and statistically significant for
rural primary school graduates, and the magnitude is comparable to that for rural literacy. While
the coefficient on board spending is positive and significant for secondary school graduates in
specifications without the social and development controls, the coefficient becomes negative and
statistically insignificant once we add those controls. This suggests that historical income,
development and social structure are necessary variables to consider in these regressions. It is
reassuring that after controlling for them, historical spending is unrelated to secondary school
outcomes, as we would expect.
Table 5b, 5c and 5d replicate the regressions for outcomes in 1971, 1981 and 1991. The
coefficient on board spending is positive and statistically significant for total, rural, 10-19 age
specific and male rural literacy in each of the cross sections. The results on primary school
graduates are imprecisely estimated for the 1971 cross-section, but are positive and significant
for the 1981 and 1991 cross-sections. After adding the necessary controls, historical spending is
not significantly correlated with secondary school graduates in any of the cross sections.
Broadly, the findings suggest that colonial public spending has had far reaching effects and
continues to influence educational outcomes well into the 1990s.
15
4.2 Instrumental Variables Results
Despite the controls and state fixed effects, there may be concern that the OLS estimates
are picking up unobservable heterogeneity across districts, which is correlated with both
historical spending and contemporary outcomes. However, 1911 land revenues offer an
instrumental variable for 1911 board spending. Chaudhary (2010) offers a more detailed
argument in favor of using land revenues as an instrument for board spending in the colonial
period. Land revenues were strongly correlated with board expenditures and were perhaps
unlikely to be systematically related to the error term after controlling for observable differences
in geography and development across districts. Anecdotal evidence indicates that revenue
calculations were plagued with idiosyncrasies creating quasi-random variation in both land
revenues and cesses. Land revenues determined cesses and so we expect them to strongly
influence board spending.
Appendix table 1 examines the determinants of 1911 per-capita board expenditures on
education, and land revenues are a key explanatory variable. Although the coefficient is higher in
specifications without province fixed effects, almost two-thirds of the land revenue effect is
driven by differences within provinces. A 10 percent increase in per-capita revenues leads to a 3
percent increase in average educational expenditures (specification 7) with an F-statistic of 12 on
land revenues. The dummy for Temporary Settlement districts is significant in the across
province comparisons (specifications 3 and 4), but neither this variable nor the type of land
tenure system (proportion of non-landlord tenures) from Banerjee and Iyer (2005) has any
statistically significant effect on expenditures controlling for province fixed effects (specification
5). This is because Land Settlements and land tenure systems did not vary within provinces.
Land revenues are thus strongly correlated with spending, but a valid instrument also has
16
to be unrelated to unobservable returns to contemporary literacy. In principle, the revenues were
supposed to capture a percentage of the rental assets or agricultural surplus of a district. Soil and
rainfall were two objective factors that influenced the assessment computation. For example,
districts with alluvial soil enjoyed a larger agricultural surplus and probably paid higher land
taxes. Nonetheless, discussions on assessment procedures (Baden-Powell 1972, Chand 1931)
indicate revenues varied idiosyncratically even after accounting for differences in geography and
development.
Contemporary measures of agricultural productivity for the post-independence period
offer a plausible test to assess the randomness of land revenues to contemporary educational
outcomes. The India Agriculture and Climate Data Set (IACDS) reports measures of agricultural
for the years 1957 to 1987. Using these data, appendix table 2 explores the correlation between
productivity in the post-independence period and colonial land revenues, controlling for
differences in geography, rainfall and socio-economic factors (i.e., the same set of controls as in
appendix table 2).6 Columns one to four focus on agricultural productivity of the major crops,
namely bajra, jowar, maize, rice and wheat, while columns five to eight focus on all crops
reported in the IACDS.7
To control for changes in agricultural practices introduced by the Green Revolution, I
break the data in 1965 because according to the IACDS high yielding varieties of seeds were first
introduced in 1966 and slowly spread over the 1970s and 80s. Consequently, I report the findings
separately for the first year of the data (1957), average productivity for the years 1957 to 1965,
average for 1966 to 1987 and average for 1957 to 1987. Colonial revenues are statistically
6
Since the IACDS only reports data for contemporary Indian districts, the regressions exclude districts of former
British India that are a part of contemporary Pakistan and Bangladesh.
7
This includes the major crops and the following: barley, cotton, groundnut, gram, jute, other pulses, potato, ragi,
tur, rapeseed and mustard, sesame, soybean, sugar, sunflower and tobacco.
17
unrelated to agricultural productivity in all the specifications, providing some quantitative
evidence of their randomness. Moreover, the findings on other controls such as rainfall and
historical development are as expected, with higher rainfall and development both contributing
to greater productivity.
Table 6 presents the instrumental variable results for each of the cross sections. I only
present the fully loaded regressions including all the necessary controls and state fixed effects.
The IV results on board spending are very different from the OLS results in table 3. Board
spending is not significantly related to total literacy in any year, but is positive and statistically
significant for rural literacy. This finding is perhaps not too surprising given the rural nature of
the historic boards. In principle, the effects on total literacy would be imprecisely estimated
because the spending only influences the rural portion of total literacy.
Row 3 focuses on age specific rural literacy and board spending has a precisely estimated
positive effect on 1961 and 1971 literacy. The coefficient on 1981 literacy is marginally
significant, while the effect on 1991 literacy cannot be statistically distinguished from zero. The
effects on male rural literacy in row 4 are positive but imprecisely estimated for 1961 and 1971
cross-sections. They are not significant for the 1981 and 1991 cross-sections. Surprising, the IV
estimates are insignificant for 1961 primary school graduates although they are positive and
significant for the 1971 and 1981 cross-sections. Finally, historic public investments do not have
any effect on secondary school graduates in either of the cross sections.
Broadly, the IV results suggest colonial public investments influenced outcomes up to
1971 and marginally up to 1981 (for primary school graduates), but not 1991. Moreover, the
effects appear to be most significant for age groups 10 to 19 and primary school graduates. This
suggests the underlying mechanism from colonial spending to contemporary outcomes is through
18
the contemporary provision of primary education. But, the link has weakened over time and by
1991 there is no effect of history as such on educational outcomes. In the next section, we
discuss potential explanations to account for these findings.
6. Why do colonial investments matter?
If higher colonial public investments translate into higher contemporary public
investments for education at the district level, then persistence in public spending can account for
the findings. Larger public investments in the colonial period perhaps facilitated the expansion
of the public primary school system after independence when larger resources became available.
Despite the introduction of a new fiscal system in 1950, there does appear to be some persistence
in public spending patterns before and after Indian independence. The formulas used to guide
public allocation rules were often based on historical expenditure patterns generating remarkable
persistence in spending over time.
Table 7a presents public expenditures at the province-level from 1901 to 1961
highlighting the persistence in public spending patterns. Provinces and states such as Bombay
and Madras had a historical legacy of high spending in the colonial period due to the Temporary
Settlement and other idiosyncratic reasons. And, these areas continued to receive above average
public funds in the decades immediately after independence. In comparison, Bihar and Orissa
had below average spending in the colonial period and consistently lagged behind the national
average after independence. Thus, there appears to be a positive relationship between historical
and current levels of spending with Maharashtra and Gujarat emerging as high spending areas in
the colonial period, and Bihar and Orissa as generally low spending areas.
Table 7b documents total expenditures and the provincial patterns are very similar
suggesting private expenditures failed to substitute for the low levels of public spending.
19
Moreover, private spending became a smaller share of total spending over the 20th century. In the
early 20th century, public and private spending accounted for 50 percent of total spending but by
1981 public spending accounted for 85 percent of total education spending (table 1). Although
these statistics are at the province-level, it is quite feasible district-level spending patterns mirror
the provincial patterns. At the very least, these patterns indicate the Indian Government did not,
at least initially, follow a strong redistributive policy to equalize spending differentials across
different parts of the country. This is supported by qualitative evidence in the national five-year
plans, which promoted public investments in capital-intensive industries as opposed to providing
basic public goods such as primary schools to a larger share of the population. The big increase
in public spending on education did not occur till the 1970s.
The Government may also have been constrained in the 1950s and 1960s by political
constituencies that supported the earlier historical distribution of public funds and benefited from
the distortions. Rajan (2009) outlines a theoretical model where historical inequalities in
endowments, public investments or opportunities can create political constituencies unwilling to
support pro-poor i.e. pro-educational policies. In the context of British India, larger rural public
spending in the colonial period perhaps reduced the inequality in access to schooling, which in
turn may have created political constituencies willing to support the expansion of primary
education in post-independence India. In comparison, lower colonial investments in areas such as
Bihar and Orissa perhaps worsened the inequality in access to educational opportunities and
these areas in turn were unable to develop constituencies in favor of reform without strong
backing from the central government.
While these explanations are adequate up to the 1970s, the IV estimates emphasize that
something changed between the 1970s and 1990s. Historical investments are not significant
20
determinants of educational performance in 1981 or 1991. Banerjee and Somanathan (2007)
offer an explanation in the changing nature of public goods provision between 1971 and 1991.
Their main findings highlight a high degree of convergence in the provision of several basic
public goods between 1971 and 1991. Areas with lower levels of public goods including schools
in 1971 experienced faster growth relative to other areas between 1971 and 1991. Following
Indira Gandhi’s ‘garabi hatao’ campaign in the 1970s, the central government made the
expanded provision of basic public services a key policy and allocated larger funds to states to
achieve these goals. Such policies helped weaken the relationship between colonial investments
and contemporary educational outcomes in the 1980s and 1990s.
7. Conclusion
This paper explores the relationship between colonial public investments in the early 20th
century and contemporary educational outcomes such as literacy using a unique dataset of 147
Indian districts from 1911 to 1991. The main findings suggest colonial public investments had a
large and positive influence on rural literacy up to the 1970s. A 10 percent increase in colonial
public investments is associated with a 6-percentage point increase in the 1971 rural literacy rate.
The most credible mechanism underlying these results is a strong persistence in public spending
patterns over time. Unlike other contexts, the effects of colonial education policies in India
however are relatively short lived. Colonial spending is influential for at most three decades after
independence because the government enacted specific policy reforms in the 1970s to increase
the provision of basic public goods. The results suggest these reforms were successful is severing
the historical roots of contemporary educational outcomes.
21
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Development: Selected Regional Perspectives. Clarendon Press, Oxford, 1996.
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23
Tilak, Jandhyala B. G. “Center-State Relations in Financing Education in India”, Comparative
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2001.
Map of British India and Princely States
24
Map of Indian Union, 2001
25
TABLE 1: COMPOSITION OF EDUCATION SPENDING
PUBLIC
PRIVATE
Govt.
District &
Municipal Funds
TOTAL
Fees
Other
TOTAL
Total PerCapita
Expenditures
British India
1901-02
1911-12
1921-22
1931-32
1941-42
29%
31%
49%
46%
44%
19%
19%
13%
16%
14%
48%
51%
63%
62%
58%
32%
33%
21%
23%
28%
21%
16%
17%
15%
14%
52%
49%
37%
38%
42%
0.17
0.21
0.74
1.02
1.04
Independent India
1951-52
1961-62
1971-72
1981-82
57%
69%
76%
80%
11%
7%
6%
5%
68%
75%
81%
85%
22%
17%
13%
12%
11%
8%
6%
3%
32%
25%
19%
15%
3.5
9.0
23.0
52.6
Source: Data from 1901 to 1941 are from Progress of Education in India, Quinquennial Reviews (1927-32 and 1937-47).
The 1951-1981 data are from the Statistical Abstracts of the Indian Union, except for the composition of spending in 1971
and 1981 that are from Tilak (1989), table 1. The pre-1947 data for British India include parts of present day Pakistan and
Bangladesh and exclude the princely states, while the post-1947 are for the entire Indian Union excluding Pakistan and
Bangladesh. The per-capita figures are nominal.
TABLE 2: LITERACY RATES 1931
Overall
1931
1911
1931
HINDU
BRAHMAN
LOWER CASTES
TRIBAL (S.T)
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
INDIA
9.9
5.9
16.3
2.9
14.4
2.1
56.4
15.1
2.4
0.2
1.3
0.2
Provinces (British India)
Bengal
Bombay
Madras
Assam
Central Provinces
Punjab
UP
Bihar and Orissa
11.1
10.8
10.8
9.3
6.6
6.3
5.5
5.3
7.7
6.9
7.5
4.7
3.3
3.7
3.4
3.9
18.2
17.6
18.8
15.6
12.0
10.0
9.4
9.8
3.3
3.1
3.0
2.2
1.2
1.7
1.1
0.8
26.3
17.8
18.2
18.6
11.8
16.6
9.1
10.2
5.0
2.6
2.6
2.5
0.1
2.6
0.1
0.7
64.5
78.8
80.0
.
58.1
26.8
29.3
35.6
21.6
23.1
28.6
.
12.2
3.4
2.5
2.8
6.3
4.9
3.2
.
4.5
1.6
0.9
2.1
0.9
0.3
0.3
.
0.2
0.2
0.0
0.1
1.4
1.0
0.6
3.1
1.2
.
.
1.3
0.4
0.0
0.0
0.4
0.1
.
.
0.1
Princely States and Agencies
Cochin State
33.7
Travancore State
28.9
Baroda State
20.9
Mysore State
10.6
Central India Agency
5.2
Hyderabad State
5.0
Kashmir State
4.0
Rajputana Agency
4.3
15.1
15.0
10.1
6.3
2.6
2.8
2.1
3.2
46.0
40.8
33.1
17.4
9.2
8.5
7.0
7.6
22.0
16.8
7.9
3.3
0.1
0.1
0.1
0.1
42.8
39.9
31.5
16.1
8.3
7.0
18.7
6.2
16.9
14.2
7.2
2.4
0.1
0.1
1.9
0.0
.
.
78.0
78.3
26.5
70.1
.
23.7
.
.
28.4
34.4
2.7
7.9
.
1.4
.
.
.
.
0.6
1.0
.
.
.
.
.
.
0.0
0.1
.
.
.
3.8
3.7
2.2
0.02
1.0
1.6
.
.
0.0
0.0
0.0
0.0
0.0
0.0
.
Source: Census of India 1931, Volume 1, Part 1 - Report, Chapter IX, Subsidiary Tables I, II, III, and V. Individual data are not presented for the smaller provinces and princely states.
Detailed data on the different groups is for 1931. Madras includes Cochin and Travancore States for Brahman and lower caste series. All India Brahman and lower caste literacy is just
the average across provinces and princely states included in this table. Literacy rates for lower castes are averages for castes that were enumerated as lower castes in the social
precedence tables of 1901. The 1931 census reports literacy rates for only a sample of castes enumerated as lower castes and so these numbers are not strictly comparable across
provinces.
TABLE 3: LITERACY RATES 1991
TOTAL
SCHEDULED CASTES
Male
Female
SCHEDULED TRIBES
Male
Female
Overall
Male
Female
INDIA
52.21
64.13
39.29
49.91
23.76
40.65
18.19
Bombay, Baroda State
Gujarat
Maharashtra
61.29
64.87
73.13
76.56
48.64
52.32
75.47
70.45
45.54
41.59
48.25
49.09
24.20
24.03
Madras, Cochin, Mysore and Travancore States
Andhra Pradesh
44.09
55.13
Karnataka
56.04
67.26
Kerala
89.81
93.62
Tamil Nadu
62.66
73.75
32.72
44.34
86.13
51.33
41.88
49.69
85.22
58.36
20.92
25.95
74.31
34.89
25.25
47.95
63.38
35.25
8.68
23.57
51.07
20.23
Punjab
Haryana
Himachal Pradesh
Punjab
55.85
63.86
58.51
69.10
75.36
65.66
40.47
52.13
50.41
52.06
64.98
49.82
24.15
41.02
31.03
0.00
62.74
0.00
0.00
31.18
0.00
Assam, Bengal, Bihar and Orissa
Assam
52.89
West Bengal
57.70
Bihar
38.48
Orissa
49.09
61.87
67.81
52.49
63.09
43.03
46.56
22.89
34.68
63.88
54.55
30.64
52.42
42.99
28.87
7.07
20.74
58.93
40.07
38.40
34.44
38.98
14.98
14.75
10.21
Central Provinces & Berar, Central India Agency
Madhya Pradesh
44.20
58.42
28.85
50.51
18.11
32.16
10.73
United Provinces
Uttar Pradesh
25.31
40.80
10.69
49.95
19.86
41.60
55.73
Source: Census of India, 1991. Individual data are not presented for Rajasthan, the smaller eastern states and union territories.
TABLE 4: DISTRICT BOARD EDUCATIONAL EXPENDITURES AND INCOME
DB Educational Expenditures in 1912-13
Per 1000 of the
population (£)
As % of Total Educ.
As % of Total
As % of Total Public
Exp.
Primary Educ. Exp Primary Educ. Exp.
British India
3.59
15%
49%
65%
Assam
Bengal
Bihar and Orissa
Bombay
Central Provinces and Berar.
Madras
Punjab
United Provinces
5.60
2.43
1.65
10.27
4.58
3.03
5.12
3.55
30%
8%
13%
20%
25%
12%
18%
21%
84%
40%
34%
42%
61%
34%
85%
93%
87%
80%
61%
59%
66%
38%
93%
100%
DB Revenues in 1912-13 Per 1000 of the population(£)
Cesses (Additional Other Sources (for
taxes on land
e.g. Provincial
revenues)
grants)
Total Income
% of Cesses and
Other Sources to
Total Income
British India
6.53
5.96
16.65
75%
Assam
Bengal
Bihar and Orissa
Bombay
Central Provinces and Berar
Madras
Punjab
United Provinces
7.40
4.28
4.56
10.84
4.99
10.80
10.05
5.20
7.02
4.35
3.08
10.23
9.34
10.13
6.75
4.26
23.11
10.51
9.66
25.78
16.07
31.85
22.92
11.53
62%
82%
79%
82%
89%
66%
73%
82%
Source: Statistical Abstracts of India and Progress of Education in India, Eighth Quinquennial Review (1917-1922). The statistical
abstracts separate educational expenditures into direct expenditures on different levels of education and indirect expenditures on
buildings, etc. I constructed total primary education expenditure as the sum of direct expenditures on primary schools and a proportion
of indirect expenditures on buildings with the proportion equal to the direct primary school expenditures relative to total direct
expenditures on education. Information on public primary education expenditures is from 1916-17 and was obtained from the
Quinquennial Review, Volume II, Supplemental Tables, page 125. In the bottom panel, provincial contributions or grants to district
boards are included under "other sources" along with school fees and miscellaneous income sources. The omitted category of income is
tolls.
TABLE 5a: OLS Effects of Colonial Public Investments on 1961 Educational Outcomes
(1)
(2)
(3)
(4)
DB Educational Exp.
per- rural pop 1911
0.0429***
[0.0079]
0.0743***
[0.0137]
Total Literacy Rate
0.0729***
[0.0128]
(5)
0.0319**
[0.0130]
0.0276*
[0.0166]
0.0371***
[0.0104]
0.0320**
[0.0137]
Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0293***
[0.0070]
0.0565***
[0.0101]
0.0568***
[0.0098]
Rural Literacy Rate for the Population Aged 10 to 19
DB Educational Exp.
per- rural pop 1911
0.0700***
[0.0113]
0.0996***
[0.0178]
0.1010***
[0.0170]
0.0715***
[0.0184]
0.0739***
[0.0230]
0.0354**
[0.0162]
0.0315
[0.0196]
Male Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0304***
[0.0093]
0.0656***
[0.0146]
0.0646***
[0.0145]
Primary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
0.0331***
[0.0069]
0.0318***
[0.0059]
0.0314***
[0.0057]
0.0235***
[0.0063]
0.0224***
[0.0071]
Secondary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
State FE
Geographic Controls
Social & Devel. Controls
Other Historical
Investment Controls
0.0078***
[0.0024]
0.0156***
[0.0058]
0.0144***
[0.0054]
-0.0008
[0.0053]
-0.0013
[0.0056]
No
No
No
No
Yes
No
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include
dummies for coastal districts, black, red and alluvial soil, and normal rainfall. Social and economic controls include population density, number of
years since first railway line, income tax revenues per-capita, share of Brahmans, Christians, Buddhists, Muslims, Tribes, low castes and a
measure of caste and religious fragmentation. Other Historical Investments include district board spending on medical and infrastructure services.
All controls are for 1911.
TABLE 5b: OLS Effects of Colonial Public Investments on 1971 Educational Outcomes
(1)
(2)
(3)
(4)
DB Educational Exp.
per- rural pop 1911
0.0591***
[0.0093]
0.0794***
[0.0146]
Total Literacy Rate
0.0784***
[0.0141]
(5)
0.0323**
[0.0144]
0.0293
[0.0179]
0.0381***
[0.0116]
0.0357**
[0.0147]
Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0470***
[0.0079]
0.0629***
[0.0112]
0.0638***
[0.0113]
Rural Literacy Rate for the Population Aged 10 to 19
DB Educational Exp.
per- rural pop 1911
0.0914***
[0.0137]
0.0962***
[0.0202]
0.0972***
[0.0203]
0.0614***
[0.0207]
0.0656***
[0.0244]
0.0362**
[0.0166]
0.0361*
[0.0199]
Male Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0501***
[0.0096]
0.0681***
[0.0145]
0.0684***
[0.0151]
Primary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
0.0269***
[0.0074]
0.0446***
[0.0117]
0.0450***
[0.0124]
0.0297*
[0.0153]
0.0291
[0.0198]
Secondary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
State FE
Geographic Controls
Social & Devel. Controls
Other Historical
Investment Controls
0.0179***
[0.0062]
0.0298**
[0.0115]
0.0278***
[0.0105]
-0.003
[0.0114]
-0.0057
[0.0120]
No
No
No
No
Yes
No
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include
dummies for coastal districts, black, red and alluvial soil, and normal rainfall. Social and economic controls include population density, number of
years since first railway line, income tax revenues per-capita, share of Brahmans, Christians, Buddhists, Muslims, Tribes, low castes and a
measure of caste and religious fragmentation. Other Historical Investments include district board spending on medical and infrastructure services.
All controls are for 1911.
TABLE 5c: OLS Effects of Colonial Public Investments on 1981 Educational Outcomes
(1)
(2)
(3)
(4)
DB Educational Exp.
per- rural pop 1911
0.0661***
[0.0102]
0.0945***
[0.0170]
Total Literacy Rate
0.0928***
[0.0163]
(5)
0.0417**
[0.0163]
0.0385**
[0.0188]
0.0497***
[0.0140]
0.0483***
[0.0161]
Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0574***
[0.0092]
0.0816***
[0.0143]
0.0820***
[0.0139]
Rural Literacy Rate for the Population Aged 10 to 19
DB Educational Exp.
per- rural pop 1911
0.0981***
[0.0137]
0.1119***
[0.0226]
0.1120***
[0.0219]
0.0684***
[0.0235]
0.0758***
[0.0253]
0.0478***
[0.0179]
0.0493**
[0.0197]
Male Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0588***
[0.0102]
0.0847***
[0.0167]
0.0857***
[0.0172]
Primary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
0.0340***
[0.0067]
0.0585***
[0.0100]
0.0589***
[0.0097]
0.0364***
[0.0091]
0.0346***
[0.0107]
Secondary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
State FE
Geographic Controls
Social & Devel. Controls
Other Historical
Investment Controls
0.0377***
[0.0111]
0.0579***
[0.0187]
0.0544***
[0.0175]
0.0021
[0.0190]
-0.0026
[0.0201]
No
No
No
No
Yes
No
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include
dummies for coastal districts, black, red and alluvial soil, and normal rainfall. Social and economic controls include population density, number of
years since first railway line, income tax revenues per-capita, share of Brahmans, Christians, Buddhists, Muslims, Tribes, low castes and a
measure of caste and religious fragmentation. Other Historical Investments include district board spending on medical and infrastructure services.
All controls are for 1911.
TABLE 5d: OLS Effects of Colonial Public Investments on 1991 Educational Outcomes
(1)
(2)
(3)
(4)
DB Educational Exp.
per- rural pop 1911
0.0735***
[0.0110]
0.0894***
[0.0187]
Total Literacy Rate
0.0860***
[0.0181]
(5)
0.0358*
[0.0185]
0.0347*
[0.0209]
0.0445**
[0.0175]
0.0470**
[0.0192]
Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0664***
[0.0105]
0.0800***
[0.0175]
0.0784***
[0.0168]
Rural Literacy Rate for the Population Aged 10 to 19
DB Educational Exp.
per- rural pop 1911
0.1103***
[0.0138]
0.1099***
[0.0250]
0.1015***
[0.0254]
0.0560**
[0.0275]
0.0705**
[0.0295]
0.0398*
[0.0208]
0.0476**
[0.0224]
Male Rural Literacy Rate
DB Educational Exp.
per- rural pop 1911
0.0627***
[0.0112]
0.0988***
[0.0220]
0.0807***
[0.0198]
Primary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
0.0537***
[0.0087]
0.0664***
[0.0141]
0.0652***
[0.0138]
0.0335**
[0.0134]
0.0350**
[0.0143]
Secondary School Graduates per rural population
DB Educational Exp.
per- rural pop 1911
State FE
Geographic Controls
Social & Devel. Controls
Other Historical
Investment Controls
0.0602***
[0.0167]
0.0783***
[0.0286]
0.0699**
[0.0280]
-0.0145
[0.0325]
-0.0223
[0.0354]
No
No
No
No
Yes
No
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include
dummies for coastal districts, black, red and alluvial soil, and normal rainfall. Social and economic controls include population density, number of
years since first railway line, income tax revenues per-capita, share of Brahmans, Christians, Buddhists, Muslims, Tribes, low castes and a
measure of caste and religious fragmentation. Other Historical Investments include district board spending on medical and infrastructure services.
All controls are for 1911.
TABLE 6: IV Effects of Colonial Public Investments on post-1961 Educational Outcomes
1961
1971
1981
1991
DB Educational Exp. perrural pop 1911
Total Literacy Rate
0.0351
0.034
[0.0389]
[0.0472]
0.0417
[0.0336]
0.0249
[0.0534]
Rural Literacy Rate
DB Educational Exp. perrural pop 1911
0.0610**
[0.0278]
0.0607*
[0.0321]
0.0641*
[0.0385]
0.0478
[0.0471]
Rural Literacy Rate for the Population Aged 10 to 19
DB Educational Exp. perrural pop 1911
0.1336***
[0.0483]
0.1230**
[0.0589]
0.0942
[0.0592]
0.044
[0.0685]
Male Rural Literacy Rate
DB Educational Exp. perrural pop 1911
0.0625
[0.0394]
0.0663
[0.0427]
0.0645
[0.0477]
0.0368
[0.0561]
Primary School Graduates per rural population
DB Educational Exp. perrural pop 1911
0.0158
[0.0169]
0.0854**
[0.0332]
0.0548**
[0.0261]
0.0308
[0.0372]
Secondary School Graduates per rural population
DB Educational Exp. perrural pop 1911
State FE
Geographic Controls
Social & Devel. Controls
Other Historical Investment
Controls
-0.0109
[0.0126]
-0.0283
[0.0285]
-0.0272
[0.0474]
-0.0314
[0.0780]
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic
controls include dummies for coastal districts, black, red and alluvial soil, and normal rainfall. Social and economic controls
include population density, number of years since first railway line, income tax revenues per-capita, share of Brahmans,
Christians, Buddhists, Muslims, Tribes, low castes and a measure of caste and religious fragmentation. Other Historical
Investments include district board spending on medical and infrastructure services. All controls are for 1911.
TABLE 7A: EXPENDITURES FROM PUBLIC REVENUES PER CAPITA
1901-02
1911-12
1921-22
1931-32
1941-42
1951-52
1961-62
Bombay
Punjab
Madras
Assam
Central Provinces
United Provinces
Bengal
Bihar and Orissa
0.19
0.09
0.08
0.08
0.08
0.06
0.05
0.25
0.12
0.10
0.06
0.12
0.09
0.07
1.12
0.59
0.46
0.34
0.48
0.44
0.33
0.22
1.23
0.87
0.74
0.41
0.49
0.56
0.35
0.28
.
.
.
.
.
.
.
.
3.56
2.42
2.77
2.03
2.07
1.67
2.79
1.18
8.91
7.65
8.63
6.78
6.73
4.03
7.25
3.74
INDIA
0.08
0.11
0.47
0.63
.
2.36
6.79
TABLE 7B: TOTAL EDUCATIONAL EXPENDITURES PER CAPITA
1901-02
1911-12
1921-22
1931-32
1941-42
1951-52
1961-62
Bombay
Madras
Punjab
Bengal
Assam
Central Provinces
United Provinces
Bihar and Orissa
0.31
0.21
0.16
0.16
0.13
0.11
0.10
0.40
0.23
0.21
0.21
0.15
0.15
0.14
1.53
0.80
0.92
0.71
0.46
0.58
0.66
0.34
1.83
1.21
1.31
0.84
0.58
0.67
0.80
0.46
2.21
1.25
1.25
0.91
0.72
0.72
0.84
0.51
5.62
3.94
4.36
5.03
2.98
2.65
2.87
1.70
12.29
10.70
10.60
10.92
8.76
7.69
6.09
4.98
INDIA
0.17
0.21
0.74
1.02
1.04
3.49
9.02
* Data from 1901 to 1941 are from Progress of Education in India, Quinquennial Reviews (various volumes). Assam includes Eastern Bengal and Assam
in 1911-12. The 1951-1961 data are from the Statistical Abstracts of the Indian Union. The pre-1947 data for British India include parts of present day
Pakistan and Bangladesh and exclude the princely states, while the post-1947 are for the entire Indian Union excluding Pakistan and Bangladesh. Madras
in 1961 is the average for Madras, Andhra Pradesh and Kerala, while Bombay in 1961 is the average for Gujarat and Maharashtra. Bengal post-1947
refers to West Bengal. All figures are nominal.
APPENDIX TABLE 1: DETERMINANTS OF 1911 DISTRICT BOARD EDUCATIONAL EXPENDITURES
(1)
(2)
(3)
(4)
(5)
(6)
Land Tax Revenues per-capita
0.0289***
[0.0046]
0.0161***
[0.0055]
Temporary Settlement
0.0267***
[0.0050]
0.0287***
[0.0074]
0.0214***
[0.0071]
0.0169***
[0.0043]
0.0138***
[0.0042]
-0.0034
[0.0071]
0.0146*
[0.0076]
0.002
[0.0087]
Proportion of Non-Landlord
(Banerjee and Iyer 2005)
Province Fixed Effects
Geographic Controls
Social and Economic Controls
Constant
Observations
Adjusted R-squared
F-test: Land Tax Revenues = 0
Prob > F
(7)
0.0173***
[0.0055]
0.0178***
[0.0051]
No
No
No
Yes
No
No
No
No
No
No
No
No
Yes
No
No
Yes
Yes
No
Yes
Yes
Yes
0.0218***
[0.0060]
0.0519***
[0.0119]
0.0114***
[0.0043]
0.003
[0.0069]
0.0455***
[0.0159]
0.0294
[0.0199]
0.0667*
[0.0392]
197
0.51
38.97
0.0000
197
0.72
8.66
0.0037
197
0.53
27.92
0.0000
153
0.58
15.14
0.0002
153
0.79
9.13
0.003
197
0.72
9.82
0.0020
197
0.80
12.33
0.0006
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include dummies for coastal districts,
black, red and alluvial soil, and normal rainfall. Social and economic controls include population share supported by industry, population share supported by commerce,
population share supported by professionals, population density, number of years since first railway line, income tax revenues per-capita, share of Brahmans, Christians,
Buddhists, Muslims, Tribes, low castes and a measure of caste and religious fragmentation.
APPENDIX TABLE 2: RELATIONSHIP BETWEEN AGRICULTURAL PRODUCTIVITY AND COLONIAL LAND REVENUES
1957
Ag. Productivity for Major Crops
1957-65 Avg. 1966-87 Avg. 1957-87 Avg.
1957
Ag. Productivity for All Crops
1957-65 Avg. 1966-87 Avg. 1957-87 Avg.
(in 1911)
Land Tax Revenues per-capita
0.0339
[0.0228]
0.0177
[0.0154]
0.0282
[0.0278]
0.0249
[0.0235]
0.0081
[0.0204]
0.0171
[0.0158]
0.0246
[0.0285]
0.0223
[0.0240]
Population Density
0.2272**
[0.0979]
0.2242***
[0.0721]
0.4116**
[0.1634]
0.3563***
[0.1355]
0.3490***
[0.1101]
0.2340***
[0.0779]
0.4250**
[0.1649]
0.3654***
[0.1373]
Number of years since railways
0.0030**
[0.0014]
0.0022***
[0.0007]
0.0035**
[0.0014]
0.0031***
[0.0012]
0.0032**
[0.0013]
0.0022***
[0.0008]
0.0034**
[0.0014]
0.0031**
[0.0012]
Rainfall
0.0067***
[0.0019]
0.0050***
[0.0013]
0.0059***
[0.0021]
0.0056***
[0.0019]
0.0077***
[0.0020]
0.0051***
[0.0013]
0.0059***
[0.0022]
0.0056***
[0.0019]
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0.1462
[0.2836]
0.1323
[0.1498]
0.1409
[0.2536]
0.1359
[0.2141]
0.111
[0.2251]
0.1279
[0.1493]
0.1821
[0.2633]
0.1704
[0.2209]
150
0.575
150
0.598
150
0.621
150
0.613
150
0.613
150
0.596
150
0.619
150
0.613
Province Fixed Effects
Geographic Controls
Social and Economic Controls
Constant
Observations
Adjusted R-squared
Notes: Robust standard errors in parentheses. * significant at 10%; ** significant at 5%; *** significant at 1%. Geographic controls include dummies for coastal districts, black, red and
alluvial soil. Social and economic controls include population share supported by industry, population share supported by commerce, population share supported by professionals,
income tax revenues per-capita, share of Brahmans, Christians, Buddhists, Muslims, Tribes, low castes and a measure of caste and religious fragmentation.