Persistent Poverty and Path Dependency: Agrarian Reform: Lessons from the United States and India

Abstract

Summaries The historical experience of the United States, where aggregate wealth multiplied in abundance but persistent poverty is glaring, offers concrete illustration that growth is not a sufficient condition for poverty alleviation in the transition from agrarian society. In contrast, the State of Kerala in South India abolished an agrarian system based on agrestic serfdom and slavery in a compressed time period and has been notably successful in reducing the incidence of poverty despite income and growth rates well below the Indian mean. Though sometimes romanticised, the ‘Kerala model’ offers both positive and negative lessons from its thorough agrarian reform. Though less prominent in public discourse after the end of the Cold War, agrarian reform still offers significant poverty reduction advantages in comparison with alternatives.