Anand V. Swamy

Gender and Corruption

Using several independent data sets, we investigate an aspect of corruption that has received little attention: its differential incidence by gender. We show using micro data that women are less involved in bribery, and are less likely to condone bribe taking. Cross-country data show that corruption is less severe where women comprise a larger share of the labor force, and where women hold a larger share of parliamentary seats.

The Causes and Consequences of Corruption

In recent years, economists have come to recognize that corruption is not just an aberration or a nuisance; it is a systemic feature of many economies, which constitutes a significant impediment to economic development. The authors present an overview of the literature on the causes and consequences of corruption and briefly comment on some policy issues, drawing on recent research, including their own.

A simple test of the nutrition-based efficiency wage model

Abstract In the nutrition-based efficiency wage model wages in labor markets in developing countries are rigid because lowering them would reduce worker productivity and increase the cost per efficiency unit. I evaluate this claim, using data from rural India. I find that, contrary to what has been assumed in these models, a wage cut should lower the cost per efficiency unit of labor.

Law and the Economy in Colonial India

Since the economic reforms of the 1990s, India’s economy has grown rapidly. To sustain growth and foreign investment over the long run requires a well-developed legal infrastructure for conducting business, including cheap and reliable contract enforcement and secure property rights. But it’s widely acknowledged that India’s legal infrastructure is in urgent need of reform, plagued by problems, including slow enforcement of contracts and land laws that differ from state to state. How has this situation arisen, and what can boost business confidence and encourage long-run economic growth? Tirthankar Roy and Anand V. Swamy trace the beginnings of the current Indian legal system to the years of British colonial rule. They show how India inherited an elaborate legal system from the British colonial administration, which incorporated elements from both British Common Law and indigenous institutions. In the case of property law, especially as it applied to agricultural land, indigenous laws and local political expediency were more influential in law-making than concepts borrowed from European legal theory. Conversely, with commercial law, there was considerable borrowing from Europe. In all cases, the British struggled with limited capacity to enforce their laws and an insufficient knowledge of the enormous diversity and differentiation within Indian society. A disorderly body of laws, not conducive to production and trade, evolved over time. Roy and Swamy’s careful analysis not only sheds new light on the development of legal institutions in India, but also offers insights for India and other emerging countries through a look at what fosters the types of institutions that are key to economic growth.

Only Twice As Much: A Rule for Regulating Lenders

Present‐day policies aiming to improve the performance of credit markets, such as group lending or creation of collateral, typically aim to change incentives for borrowers. In contrast, premodern credit market interventions, such as usury laws, often targeted the behavior of lenders. We describe and analyze a norm that, although widespread, has escaped scholarly attention: a ceiling on interest accumulation, which limits it to the amount of the original principal. We interpret this rule, which is found in Hindu, Roman, and Chinese legal traditions, as giving lenders the incentive to find more capable borrowers, who will be able to repay early, thereby improving the allocation of capital. We document the consistency between our explanation and the rationale offered by the policy makers.

Factor markets and resource allocation in colonial Punjab

It is often argued that agricultural factor markets in colonial India were underdeveloped, leading to inefficient resource use and slow agricultural development. However, there is little econometric evidence on these issues. This article outlines a model which incorporates the factor market imperfections discussed in the literature and tests the model against data from the Punjab. There is, in the statistical sense, evidence of resource misallocation; however, these effects are too small to be of much economic significance.