Working Paper: CEPR ID: DP17278
Authors: Pim de Zwart; Phylicia Soekhradj
Abstract: This article exploits a unique district-level dataset to investigate the relationship between sugar cultivation, property rights systems and land distribution in colonial Java around the turn of the twentieth century. We demonstrate a negative and statistically significant relationship between sugar cultivation and the landholder Gini. An IV strategy, employing a newly computed index of sugar suitability as instrument, suggests that this effect is causal. It is argued that sugar production in the nineteenth and early twentieth centuries stimulated the expansion and persistence of communal landholding. This communal landholding consequently led to more equally distributed plots among landholders in the early twentieth century. We emphasize the importance of local property rights institutions in mitigating the effects of export production on socioeconomic outcomes.
Keywords: property rights; institutions; colonialism; inequality; indonesia; cash crops
JEL Codes: N35; N55; Q15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Landholder Gini coefficient (D31) | Land inequality among landholders (Q15) |
| Sugar cultivation (L66) | Landholder Gini coefficient (D31) |
| Sugar production (L66) | Communal landholding (P32) |
| Sugar cultivation (L66) | Land inequality among landholders (Q15) |