BREAD Working Paper No. 243, June 2009

State-led or Market-led Green Revolution? Role of Private Irrigation Investment vis-a-vis Local Government Programs in West Bengal's Farm Productivity Growth

Pranab Bardhan, Dilip Mookherjee, Neha Kumar

Abstract

This paper estimates respective roles of private
investments in irrigation and local government programs (land
reforms, extension services, and infrastructure investments) in
the growth of farm productivity in West Bengal, India between
1981-95. Using a farm panel from a stratified random sample of
farms from major agricultural districts of West Bengal, we find
evidence that private investment in irrigation which reduced
irrigation costs for farms played an important role in the growth
process. However, the growth in private investment was itself
stimulated by tenancy registration and minikit distribution
programs implemented by local governments. This channel helps
account for the substantial spillover effects of the tenancy
reform on non-tenant farms noted in an earlier study. Hence the
observed productivity growth was a result of complementarity
between private investment incentives and state-led institutional
reforms.

Keywords: land reforms, tenancy, irrigation, agricultural development, public-private linkages

JEL classification codes: Q15, O12, O13, H44, H54

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