Caste Dominance and Economic Performance in Rural India
Author(s): Vegard Iversen /Adriaan Kalwij /Arjan Verschoor /Amaresh Dubey
Source:
Economic Development and Cultural Change,
Vol. 62, No. 3 (April 2014), pp. 423-457
Published by: The University of Chicago Press
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Caste Dominance and Economic Performance
in Rural India
vegard iversen
University of Manchester
adriaan kalwij
Utrecht University
arjan verschoor
University of East Anglia
amaresh dubey
Jawaharlal Nehru University
I. Introduction
A. Aim and Motivation
In economics, various mechanisms are recognized that, in a stratified society,
link economic welfare with signifiers of social identity such as caste, religion,
and ethnicity. Some mechanisms originate in “taste-based” ðe.g., Becker 1971Þ
or “statistical” ðe.g., Arrow 1972Þ discrimination by others and are external to
the affected group. Other mechanisms are internal and hinge on not how a
group is seen and treated by others but how its members perceive and interact
among themselves. The consequences for economic performance of a self-
image that group membership imparts ðAkerlof and Kranton 2000Þ and of the
onset of collective inertia ðe.g., Peyton Young 2001Þ are two examples.
In this article we explore empirically the proposition that the balance of forces
linking social identity to economic performance is influenced by the relative
economic or political power of the various social groups that live and work in
each other’s vicinity—to be precise, reside in the same village. We undertake this
empirical inquiry for rural India, whose village communities can be seen as a
paradigm of social stratification ðe.g., Deshpande 2001, 2011; Anderson 2011Þ.
We would like to thank F arzana Afridi, Siwan Anderson, the late Sanghamitra Das, Ashwini Deshpande,
Chetan Ghate, Stefan Jonsson, Anirban Mitra, Rinku Murgai, Richard Palmer-Jones, Indira Rajaraman,
Debraj Ray, Kunal Sen, and two anonymous referees for helpful comments and suggestions. We are
also indebted to Richar d Pa lmer-Jones for sharing the classification of agroecological zones used in this
article. Contact the corresponding author, Vegard Iversen, at Vegard.Iversen@manchester.ac.uk.
Electronically published February 26, 2014
© 2014 by The University of Chicago. All rights reserved. 0013-0079/2014/6203-0002$10.00
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We study three complementary explanations for identity-based disadvan-
tage. The first, the oppression hypothesis, originates in M. N. Srinivas’s theory
of caste dominance, which portrays a caste that apart from strong numerical
presence is also economically powerful ðSrinivas 1955Þ.
1
The oppression hy-
pothesis captures the external mechanisms linking social identity and economic
welfare and suggests that historically disadvantaged and other marginalized so-
cial groups fare worse when resident in villages dominated by upper castes.
The second, the village enclave hypothesis, corresponds with the internal
mechanisms linking identity and welfare, is theoretically ambiguous, and de-
picts a situation in which a marginalized group is dominant at the village level.
Upward mobility may then be inhibited, or conversely encouraged, by factors
internal to the group in question. To illustrate, the absence of role models or a
preference for traditional occupations could lock individuals of marginalized
backgrounds into low-level equilibrium traps ðAkerlof and Kranton 2000Þ.
By reducing the social distance between parties to rural transactions, own en-
claves could also improve the operation of vital rural markets ðAnderson 2011Þ.
Third, we evaluate the merit of the proximity hypothesis, which is anchored
in a theory of public goods provision and suggests that minority groups may
benefit from being proximate to politically well-connected and prosperous up-
per castes ðe.g., Sethi and Somanathan 2010Þ. We explain why proximity and
oppression provide complementary insights about the roots of caste-based dis-
parities in rural India.
Our article adds a timely political economy dimension and new empirical
insights to the literature addressing identity, economic disadvantage, and its
persistence. Existing studies linking economic performance to the village-level
balance of power are few, and Anderson ð2011Þ is the only other comprehen-
sive effort.
Pertaining to India and in spite of bold legislation that made reservations
of government jobs and seats in legislative assemblies and educational institu-
tions a hallmark policy, households of scheduled caste ðSC; formerly “untouch-
ables ”Þ and scheduled ðindigenousÞ tribe backgrounds continue to feature dis-
proportionately on key indicators of rural deprivation.
2
This persistence remains
apuzzlethatweattempttoshednewlighton.
1
Apart from Anderson ð2011Þ, the caste dominance concept has been applied in economic studies
by, among others, Besley, Pande, and Rao ð2005Þ, Dercon and Krishnan ð2007Þ, and Do and Iyer
ð2010Þ.
2
Caste may refer to jati ðsubcasteÞ or to the more general varna, the latter comprising four broad
occupational groups with Brahmins at the top followed by Kshatriyas ðwarriorsÞ, Vaishyas ðtraders and
merchantsÞ,andShudrasðmanual workers and craftspersonsÞ at the bottom. SCs may be portrayed
424 ECONOMIC DEVELOPMENT AND CULTURAL CHANGE
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Finally, India’s so-called silent revolution manifested in the rapid rise in
lower-caste representation in state-level legislative assemblies ðJaffrelot 2003Þ
suggests that a key ingredient for social change is already in place. Banerjee and
Somanathan’s ð2007Þ study of parliamentary constituencies and rural infra-
structure provision between 1971 and 1991 supports this view since social
groups that politically mobilized, namely, SCs, appear to have leaped forward
relative to those that did not ðSTs and MuslimsÞ.
We see two reasons for questioning the growing optimism about the re-
medial and transformative potential of the democratic process, whether on its
own or aided by political reservations ðe.g., Pande 2003Þ. First, the data used
in previous studies are too coarse to undertake the necessary welfare and pov-
erty comparisons: village variables do not adequately account for ðinfrastruc-
tureÞ quality variation, while state-level expenditure and other variables do
not capture benefit incidence and the magnitudes of improvements in enough
depth. The second is the analytical bypass of village-level institutional hurdles
to social change. With the emergence of a new, rich data set described in detail
below, we aim to remedy this neglect.
B. Background and Contribution to the Literature
March 1949: A group of Scheduled Caste members from villages around Delhi had
been thrown out of their homes by Jat landowners angered that these previously
bonded servants had the cheek to take part in local elections and graze their cattle on
the village commons.
June 1951: A village in Himachal Pradesh. A conference of SCs is attacked by
Rajput landlords. The SCs are beaten up with sticks, their leaders tied up with ropes
and confined to a cattle pound.
June 1952: A village in the Madurai district of Madras State. A SC youth asks for
tea in a glass at a local shop. Tradition entitles him only to a disposable coconut shell.
When he persists, he is kicked and hit on the head by caste Hindus.
June 1957: A village in the Parbani district of Madhya Bharat. Newly converted
Buddhists ½previously “untouchable” Hindus refuse to flay carcasses of dead cattle.
They are boycotted by the Hindu landlords, denied other work and threatened with
physical reprisals. ðGuha 2007, 380–81Þ
More than 50 years later and in spite of a weakening of the more forbidding
caste barriers, SC and ST households remain overrepresented among India’s
as a subset of the Shudras or a separate category. Their main distinguishing characteristic is a particularly
degrading ð“polluting”Þ traditional occupation. The criteria for scheduled tribe ðSTÞ classification are
ðiÞ tribal origin, ðiiÞ primitive ways of life and habitation in remote and less accessible areas, and ðiiiÞ gen-
eral backwardness in all respects ðPande 2003, 1138Þ.
Iversen et al. 425
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rural poor, illiterate, and in the former case, also the landless.
3
While rural pov-
erty is declining, these two groups, which represent 16.2% ðSCÞ and 8.2% ðSTÞ
of the country’s population, account for 47.3% of India’sruralpoorðGang, Sen,
and Yun 2008aÞ. A less sharply delineated category of disadvantaged citizens
mentioned by the constitution, other backward classes ðOBCsÞ,alsocontinuesto
have lower living standards than the mainstream population ðGang,Sen,and
Yun 2008bÞ.
4
The results reported below suggest that the same holds for Mus-
lims, the largest religious minority, accounting for 13.4% of the population
ðCensus of India, 2001Þ.
Shah et al.’s ð2006Þ study of untouchability, covering 550 villages in 11 main
states, found that SCs were prevented from full participation in local markets
and often from entering village shops in 30%–40% of the villages surveyed; in
45%–50% of these villages, SCs were prevented from selling milk to village
dairy cooperatives. Such “bans” are rooted in purity and pollution ideals and
the ensuing sensitive links between a person’s caste and the preparation and
handling of food and water ðe.g., Madsen 1991; Iversen and Raghavendra
2006Þ. Indeed, as is well known, SC hamlets tend to be separate from the
main village and often have their own drinking water source.
5
We test our hypotheses by examining the relationship between the social
identity of the groups that are economically or numerically dominant at the
village level and the income of households belonging to marginalized groups,
advancing the literature as follows. First, a few studies test for identity-based
disadvantage in India ðe.g., Kijima 2006; Gang et al. 2008aÞ but do not test
whether village-level upper-caste or own-group dominance affect economic
performance.
6
In addition, little remains known about whether and in what
3
Examples from the recent past include caste demarcators in how people dressed and spoke and what
they were allowed to do. In nineteenth-century Kerala, “when a Namboodiri Brahmin approached, a
Paraiya labourer had to cry out in advance, lest the sight of him pollute his superior” ðGuha 2007,
287Þ. Also in Kerala and during conversations with a person of higher caste, members of lowly ranked
castes were expected to use debasing words to describe themselves ðMenon 1994, 19Þ. Nambissan
ð1996Þ presents historical evidence of how SC children, while permitted to attend school, could be
denied entry to the classroom.
4
The issue was first addressed by the Other Backward Class Commission, appointed by Prime
Minister Nehru, and later and more decisively by the Mandal Commission ð 1978–80Þ. The latter’s
recommendations, extending reservation benefits to OBCs, were declared constitutionally legitimate
in 1992.
5
This is in contrast to the widespread changes in social practices in western and eastern Uttar
Pradesh reported by Kapur et al. ð2010Þ. However, unlike Kapur et al. ð2010Þ, we focus on a
fundamental, namely, household income.
6
Existing studies make use of nationally representative cross-sectional data and Blinder Oaxaca or
alternative decomposition techniques to quantify the disadvantage associated with SC, ST, or reli-
gious identity ðe.g., Kijima 2006; Gang et al. 2008aÞ. Dercon and Krishnan ð2007Þ use the In-
426 ECONOMIC DEVELOPMENT AND CULTURAL CHANGE
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