Abstract
Using a long-term dataset that correspond to the current borders for the period c.1900–2000, Chapter 8 investigates the agriculture–macroeconomy growth link in India, Pakistan, and Bangladesh. The empirical results show a long-term decline in the share of agriculture in GDP in all three regions, including the colonial period when per-capita GDP stagnated. They also show two structural changes. The first one occurred between pre- and post-1947 periods in India and Bangladesh. The portion of non-agricultural growth that can be attributable to agricultural growth increased substantially after Partition in 1947. The second one occurred around the 1970s–1980s in all the three countries, when non-agricultural growth that occurred autonomously became the main engine of macroeconomic growth.
The author is grateful to Ann Booth, Sandra Kuntz-Ficker, Masaki Nakabayashi , Tetsuji Okazaki , Vicente Pinilla , Tomoko Shiroyama , Kaoru Sugihara , Masayuki Tanimoto , P.K. Viswanatan, Henry Wilelbald, and participants at the 17th World Economic History Congress, the 2016 TNAU Conference “Toward Sustainable Development of India and South Asia: Population, Resources, and Environment,” and the Economic History Seminar at the University of Tokyo, for their useful comments on the earlier version of this chapter. Funding from a JSPS Grant-in-Aid for Scientific Research-S (22223003) is gratefully acknowledged.
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Notes
- 1.
It should be noted that these three linkage measures only partially characterise the long-term process of agricultural transformation. For the three South Asian countries, other aspects of agricultural transformation can be analysed. See Kurosaki (2015) for changes in crop composition at the macro level, Kurosaki (2017) for regional dynamics in agriculture, and Thapa, Viswanathan, Routray, and Ahmad (2010) and Briones and Felipe (2013) for the effects of agricultural transformation on poverty reduction or employment generation and the comparison of the South Asian experiences with other Asian economies.
- 2.
The main reason for this treatment is that we have more reliable data for crops and livestock subsectors than for fishing and forestry subsectors ( Sivasubramonian, 2000). Because the GDP share of fishing and forestry subsectors is very small, whether we classify them into agriculture or non-agriculture does not make any difference as far as the analysis of this chapter is concerned.
- 3.
Agricultural output in pre-1947 corresponds to the agricultural year for all the three regions, beginning on July 1 and ending on June 30 next year. In figures with limited space, the fiscal (agricultural) year 1900/1901 is shown as “1900.”
- 4.
The dataset is available from the author on request.
- 5.
The long linked series in real terms are not used in Sects. 3 and 4. As shown below, the three measures of agriculture–macroeconomy linkage are calculated using static compositions or growth rates within a decade. Therefore, the tentative nature of the long-term linkage in Fig. 8.1 does not affect the main analysis of this chapter.
- 6.
In Fig. 8.1, which is based on 1948/1949 prices, Pakistan’s per-capita GDP in 2000/2001 was slightly higher than India’s. When real GDP is evaluated using more recent base years (e.g., 2000/2001), per-capita GDP in India in 2000/2001 is higher than in Pakistan. For this reason, per-capita GDP of India and Pakistan were “similar”, as written in the text.
- 7.
Alternative measures of agriculture’s presence in the macroeconomy could be the share in labour force or in export earnings. We do not use the labour shares because the available data for the colonial period are based on population censuses conducted every ten years, lacking in annual fluctuations. In all three regions before Partition , the agricultural share in labour force was stable throughout the period (however, as the crude activity rate was going down, the agricultural labour share in the population was declining). We do not use the export shares because of their dependence on trade and foreign exchange policies.
- 8.
Jute mills established in East Pakistan during this period were mostly owned by West Pakistan capitalists (Kochanek, 1983). Therefore, although industrial production of these factories contributed to GDP in East Pakistan , it did not contribute much to GNP in East Pakistan, as most of the industrial profits were remitted from East to West Pakistan . There is no credible estimate for GNP in East Pakistan, however.
- 9.
For the comparison purpose, we re-estimated the same model with a time lag using the post-1947 data. We were not able to obtain statistically significant results at all for all the three countries.
- 10.
As a preliminary step towards this investigation, a similar version of Eq. (8.3) between cotton/jute production in the agricultural sector and raw cotton/jute export quantity was estimated. This is because data do not exist for value-added in trade separately for raw cotton and jute. Similar insignificant relations were found (details are available on request).
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Kurosaki, T. (2018). The Agriculture–Macroeconomy Growth Link in India, Pakistan, and Bangladesh: 1900–2000. In: Pinilla, V., Willebald, H. (eds) Agricultural Development in the World Periphery. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-66020-2_8
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