trade shocks and pro-democracy mass movements ...webfac/eichengreen/jha.pdfin the years immediately...

46
Trade Shocks and pro-Democracy Mass Movements: Evidence from India’s Independence Struggle Rikhil R. Bhavnani Department of Political Science University of Wisconsin-Madison Saumitra Jha Graduate School of Business Stanford University January 23, 2013 Abstract We provide the first systematic evidence on the relative importance of economic fac- tors in mobilizing the Indian subcontinent’s remarkably diverse population into one of the world’s first mass political movements in favor of democratic self-government. We show that residents of exports-producing districts that were negatively impacted by inter-war trade shocks, including the Great Depression, were more likely to support the Congress, the party of independence, in 1937 and 1946 and more likely to engage in violent insurrection in the Quit India rebellion of 1942. However, districts experiencing both positive and extreme negative shocks were associated with lowered support. Fur- ther, violent resistance was greater in districts with a greater share of non-cultivating landowners. We interpret our results as inconsistent with a “peasant rebellion” inter- pretation of mass mobilization. Instead we suggest that negative world trade shocks reduced the benefits to India’s rural labourers of openness to world trade and trade in- termediation by non-cultivating landowners, making more attractive the deal, offered by Congress’s industrialist supporters, for post-Independence trade protectionism in exchange for land reforms that democratic rule helped make credible. Emails:[email protected] ; [email protected]. This draft is preliminary and incomplete. We are particularly grateful to Dennis Appleyard for generously sharing his data and to Abhijit Banerjee, Latika Chaudhary, Jeff Frieden, Avner Greif, Richard Grossman, Lakshmi Iyer, Amaney Jamal, Helen Milner, Huggy Rao, David Stasavage, Jeffrey Williamson and to participants at seminars at Harvard PIEP, Stanford, Tufts, the ISNIE conference and the All-UC conference on the Great Specialization for helpful comments. Abhay Aneja provided excellent research assistance. Thanks also to Ishwari Bhattarai for help with the data.

Upload: others

Post on 16-Aug-2020

3 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Trade Shocks and pro-Democracy Mass Movements:

Evidence from India’s Independence Struggle

Rikhil R. BhavnaniDepartment of Political ScienceUniversity of Wisconsin-Madison

Saumitra Jha∗

Graduate School of BusinessStanford University

January 23, 2013

Abstract

We provide the first systematic evidence on the relative importance of economic fac-tors in mobilizing the Indian subcontinent’s remarkably diverse population into one ofthe world’s first mass political movements in favor of democratic self-government. Weshow that residents of exports-producing districts that were negatively impacted byinter-war trade shocks, including the Great Depression, were more likely to supportthe Congress, the party of independence, in 1937 and 1946 and more likely to engage inviolent insurrection in the Quit India rebellion of 1942. However, districts experiencingboth positive and extreme negative shocks were associated with lowered support. Fur-ther, violent resistance was greater in districts with a greater share of non-cultivatinglandowners. We interpret our results as inconsistent with a “peasant rebellion” inter-pretation of mass mobilization. Instead we suggest that negative world trade shocksreduced the benefits to India’s rural labourers of openness to world trade and trade in-termediation by non-cultivating landowners, making more attractive the deal, offeredby Congress’s industrialist supporters, for post-Independence trade protectionism inexchange for land reforms that democratic rule helped make credible.

∗Emails:[email protected]; [email protected]. This draft is preliminary and incomplete. Weare particularly grateful to Dennis Appleyard for generously sharing his data and to Abhijit Banerjee, LatikaChaudhary, Jeff Frieden, Avner Greif, Richard Grossman, Lakshmi Iyer, Amaney Jamal, Helen Milner,Huggy Rao, David Stasavage, Jeffrey Williamson and to participants at seminars at Harvard PIEP, Stanford,Tufts, the ISNIE conference and the All-UC conference on the Great Specialization for helpful comments.Abhay Aneja provided excellent research assistance. Thanks also to Ishwari Bhattarai for help with thedata.

Page 2: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

India is a geographical term. It is no more a united nation than the Equator.

— Sir Winston Churchill, March 18, 1931

The prominent role that mass mobilization can play in large-scale institutional reform,

including revolutions and democratization, has long been emphasized in prominent theo-

ries of political development (Engels and Marx, 1848, Boix, 2003, Acemoglu and Robinson,

2005, North, Wallis and Weingast, 2009). Similarly, the lack of development in many poor

societies has been often attributed to a failure to create broad coalitions in favor of benefi-

cial reform, particularly among societies riven by differences in ethnicity, wealth and other

dimensions (e.g. Engerman and Sokoloff, 2000, Acemoglu, Johnson and Robinson, 2005a,

Rajan, 2006, Jha, 2011). However, less is known about the factors that have been successful

in engendering broad-based mass mobilization in diverse societies. In this paper, we assess

the role of a particular mechanism—the role of trade shocks—in reducing the shared inter-

ests between ruler and ruled and facilitating the creation of new coalitions in favor of broad

institutional change. We do this using novel data on an important yet puzzling success:

that of the mass mobilization of the inhabitants of the countries that would become India,

Pakistan and Bangladesh in favor of (initially) democratic self-government.1

India’s successful struggle for independence from Britain marked the first major reversal

of a global process of colonization and market integration by Europeans that had been contin-

uing since the early nineteenth century (Figure 1), making it a prominent example for future

civil rights and independence movements around the world. India’s independence struggle

poses a number of intriguing puzzles for social science. Surprisingly, both for contemporary

observers like Winston Churchill and students interested in collective action, India’s inde-

pendence struggle emerged as one of the world’s first mass political movements, spanning

both rich and poor as well mobilizing supporters across much of India’s remarkable ethnolin-

1In what follows, we follow contemporary usage and refer to that portion of the Indian subcontinent underdirect or indirect British rule as ‘India,’ encompassing contemporary India, Pakistan and Bangladesh. As wewill discuss, the coalition that drove the Independence of India, the Congress party, derived its support fromdifferent economic interests with different objectives than the Muslim League that would govern Pakistan,having arguably long-term effects on both land reform and the consolidation of democracy in the independentSouth Asian states.

1

Page 3: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

guistic diversity. Surprising from the perspective of trade theory, the platform of the main

party of Independence, the Congress, was avowedly autarkic, and yet still proved broadly

popular even though India was (and remains) labor-abundant and capital-scarce, conditions

that classic trade theory and cross-country evidence suggests should favor political support

for free trade (Stolper and Samuelson, 1941, Rogowski, 1990, Hiscox, 2002, O’Rourke and

Taylor, 2006, Lopez-Cordova and Meissner, 2008, Milner and Mukherjee, 2009).2 This is still

more remarkable because in its last two decades, India’s independence struggle had become,

to an important extent, a struggle over control over India’s trade and foreign policy (see e.g.

Appendix). By 1937, ten years before Independence, India’s newly formed provincial legis-

latures had already acquired substantial local autonomy, with the British retaining control

over external policy, including overseas trade. Yet the intervening years were to see contin-

ued mass mobilization, often at high risk, by both rich and poor in favor of seizing Britain’s

remaining imperial rights, with the avowed aim of Purna Swaraj or complete independence.

A large coalition of Indians chose not to take the path of self-governing dominion within the

empire offered by the British, a path trod by Australia and Canada, with its accompanying

ease of access to within-empire trade and immigration.

How and why then did a broad coalition of South Asians form across ethnolinguistic and

economic lines to push for self-determination? In this paper, we provide the first systematic

evidence on the relative importance of economic factors, particularly exposure to trade, in

mobilizing the Indian subcontinent’s remarkably diverse population into one of the world’s

first mass political movements in favor of democratic self-government. We exploit a range of

hitherto untapped subnational (administrative district-level) data sources, assembling novel

data on mobilization in favor of democratic self-determination, including votes and turnout

in the first provincial elections in 1937, secret intelligence reports on violent insurrection

during the “Great Rebellion” of 1942 against British rule, and Congress membership on the

2The intuition is that because free trade favors the abundant factor, this should raise the value of laborin labor-abundant societies. Thus, workers should prefer free trade, and in labor-abundant societies, workerswill include the median voter.

2

Page 4: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

eve of Independence in 1946. These data are supplemented with Depression-era district level

data on crop-growing patterns, agricultural yields and employment in import and export

crops and manufactures.

We use these data to demonstrate that residents of exports-producing districts that were

negatively impacted by shocks to the value of the goods they produced between 1923 (the last

business as usual year (Appleyard, 2006)) and 1931 (just after the main impact of the Great

Depression was felt) were more likely to support the Congress, the party of independence, in

1937 and 1946 and more likely to engage in violent insurrection in the Quit India rebellion

of 1942. However, districts experiencing both positive and extreme negative world trade

shocks were associated with lowered support. Further, we find that violent support during

the Quit India rebellion was greater in districts that had greater shares of non-cultivating

landowners.

By showing that the most badly harmed by the shock to the value of their goods were not

supporters of the party of Independence, we can rule out a key alternative explanation- that

India’s mass mobilization was a ‘peasant rebellion’ of those that faced the worst economic

shocks (eg Rothermund, 1992). Instead we argue that our results reflect the role played by

negative world trade shocks in disrupting the economic benefits to Indian labourers from

imperial rule, trade openness and trade intermediaries such as landlords, making instead

broadly attractive to both proto-industrial capitalists and India’s majority population of

labourers the Congress platform of protectionism, land reform and democracy. It was this

deal, bringing together elites and non-elites, and urban and rural interests, that helped forge

one of the world’s first mass political movements and has shaped India’s political economy

ever since.

Under the broadly free trade regime that characterized South Asia under British rule in

the early 1920s, the sub-continent’s industrialists were largely uncompetitive overseas and

faced world and British competition in their domestic markets. Not surprisingly, these in-

dustrialists and mill-owners often voiced a strong demand for import trade barriers (Rother-

3

Page 5: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

mund, 1992). Yet, India under British rule had long been remarkably open to world markets.

Capital inflows under free trade naturally favour labour (Stolper and Samuelson, 1941), even

while the residents of many districts were enjoying relatively cheap foreign manufactures and

added demand for exportable primary goods, including both staples and cash crops (Fig-

ure 4). Though much of the surplus from India’s trade likely accrued to intermediaries,

including landlords (eg Kranton and Swamy, 2008), there were still strong economic benefits

to producers of exportable goods from the Raj.

Yet, metropolitan and world demand for sub-continental goods fell with Britain’s 1925

decision to return to the Gold Standard at its pre-war parity, followed by the Great De-

pression, whose major impact was felt in India in 1930 (Figure 2). Britain’s subsequent

abandonment of free trade in favor of an “imperial preference” regime favoring British man-

ufacturers also protected a small number of Indian exports that did not compete with British

goods. Thus, even while the imperial preference regime created new pro-Empire constituen-

cies among protected exporters, exogenous trade shocks reduced the benefits of Empire for

India’s unprotected exportable goods producers.

At the same time, districts differed in their ability to mitigate the shock. Prior to 1929,

India’s acreage under non-food crops had risen by 18.5% since 1923, while food crop acreage

had fallen by 2%. The Depression shock led to a fall in non-food crops and a substitution

towards food crop acreage (Figure 3. Districts where producers were better able to switch

from exports to food crops were likely also able to reduce the need that their producers

faced for the risk-sharing and trade intermediation services provided by landlords.3 With

the capital for India’s Independence movement available from industrial rather than landed

interests, and the value of the risk-sharing and trade intermediation provided by landlords

diminished by the fall in world trade, the promise of redistribution of land from the group

frozen out of the deal appears to have helped forge the coalition.4 With poor labourers

3These landlords include the explicit zamindars in the areas that fell under the Permanent Settlementbut also included landlords in ryotwari areas–the distinctions are quite blurred in this period, since landrights had often been sold on. See also Banerjee and Iyer (2005).

4Jawaharlal Nehru himself played a key role in articulating the Congress’s position, being the first national

4

Page 6: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

the median voter in many Indian jurisdictions, the promise of democratic rule brought with

it credibility to land reforms which were implemented at large-scale (though incompletely)

in the years immediately following India’s Independence.5 Thus trade shocks may have

facilitated the formation of a broad coalition of workers, from former indigo growers in

Bihar to factory workers in Gujarat providing the labour that complemented the capital

of textile manufacturers and other industrial interests necessary for India’s successful mass

mobilization. Finally, instead of being the biggest supports of a peasant rebellion, districts

experiencing extreme shocks were likely those most unable to switch away from exportables,

and thus those with a continued interest in an imperial link and a (relatively) open trade

policy.

Our paper provides evidence for a novel interpretation for the movement that led to the

democratic self-determination of one-fifth of the world’s population, and also contributes

to the social science literatures on the role of coalition formation in institutional change,

on democratization and trade as well as on decolonization. As discussed above, shocks that

encourage mass mobilization play a fundamental role in many of the most prominent theories

of institutional change (Lipset, 1960, Moore, 1966, Boix, 2003, Acemoglu and Robinson,

2005). While the particular importance of trade shocks has been emphasized in encouraging

the relative empowerment of trading groups in engendering change (Acemoglu, Johnson and

Robinson, 2005b, Jha, 2008), and of democratization as a provider of credible commitment

to redistribution (Acemoglu and Robinson, 2000), less work has focused on the role of trade

shocks in aligning the interests of sub-groups possessing the capital and the labor necessary

leader to emphasize the abolition of zamindari land tenures. In the October 1928 conference at Jhansi [UP],he wrote: “We in this Province have to face the zamindar and the kisan problem. To our misfortune wehave zamindars everywhere and like a blight they have prevented all healthy growth . . .We must thereforeface this problem of landlordism, and if we face it what can we do with it except to abolish it? There is nohalfway house. It is a feudal relic of the past utterly out of keeping with modern conditions . . . ” (Malaviya,1954)[p20-21].

5It is important to contrast the experience of Independent India and Pakistan. The Muslim League,which would rule post-Independence Pakistan ran on an platform defined by distinctions relative to Congress,particularly religious, but also in its support among landed interests. Neither land reform would occur nordemocracy consolidate in the years immediately following Independence.

5

Page 7: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

for successful mobilization in favor of democratic self-determination.6

We also build upon and contribute to an important literature in the political economy

of trade that finds, consistent with the Stolper-Samuelson intuition, that labor-intensive

democracies tend to have lower trade barriers, and in turn that variation in world trade

volumes (Rogowski, 1990, Hiscox, 2002, Ahlquist and Wibbels, 2010), colonial legacies, or

natural openness to trade (Eichengreen and Leblang, 2008, Lopez-Cordova and Meissner,

2008) explain democratization.7

We break new ground and look at within- country, rather than cross- country variation,

which enables us to build upon and reconcile these works with the puzzling coincidence be-

tween the movement of South Asian and many other post-Independence countries towards

both increased democratic self-determination and higher trade barriers. Rogowski (1990)

argues, consistent with the Stolper-Samuelson intuition, that a fall in world trade as oc-

curred during the Depression, may have given the possessors of the scarce factors—capital

and land– the rents and resources with which to push for independence, via the Congress

party. Yet, while it is likely that there was an assertiveness of domestic capitalists seeking

protection, India did not become a ‘Fascist’ state controlled by a coalition of landlords and

capitalists.8 Nor is India’s story precisely like that of Latin America in the 1930s, where the

large industrial urban sector was able to politically dominate and protectionist industrializa-

tion at the expense of exporters (Daz Alejandro, 1984, Frieden, 2006)[chp 13]. Instead, we

solve the puzzle of how the India’s mass movement towards nationalism and autarky encom-

6Indeed, there are reasons to expect that, in the absence of such trade shocks and the possibility of futureredistribution, the complementarity between capital and labor in mobilization may have made ethnic-basedmobilization more likely (Esteban and Ray, 2008).

7Milner and Mukherjee (2009) provides a very useful overview.8As Jawaharlal Nehru characterizes the nature of the coalition that emerged in the Civil Disobedience

Movement that began during the Depression:

Civil Disobedience in India has been a historic struggle; it has certainly not been a classstruggle. It has definitely been a middle class movement with a peasant backing. It couldnot, therefore, separate the classes as a class movement would have done. Yet, even in thisnational movement, there was to some extent a lining up of classes. Some of these, like thefeudal princes, the taluqdars and big zamindars [landlords] aligned themselves completely withthe [British] Government, preferring their class interest to national freedom.

Glimpses in World History, cited in Malaviya (1954)[pg. 55]

6

Page 8: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

passed rural labour, through the interaction between negative trade shocks—that reduce the

economic benefits to labour from trade intermediaries like landlords—and democratization,

which made redistribution of the assets of these intermediaries credible.

By examining subnational variation in support for independence, we also contribute

to the literature on decolonization. These works have emphasized the metropole’s inter-

ests (Lustick, 1993), the inevitable growth of nationalism (Brubaker, 1996), the obstruction

of demands for representation (Lawrence, 2007), state weakness (Lawrence, 2007), changes

in international norms (Hailey, 1943), or the destruction wrought by World War II (Clayton,

1994) in explaining variation in decolonization. Given that our use of a single case holds

these factors constant, what then explains variation in support for independence? We argue

that Indians had economic reasons to be rid of the Raj, and that variation in these interests

explain variation in support for independence. India is a particularly good case with which

to study the drivers of decolonization since, being the first major decolonization since the

aftermath of the Napoleonic Wars in Latin America, its decolonization could not have been

subject to spillover effects from elsewhere (Figure 1).9 Instead, our analysis has intriguing

parallels with recent theoretical work that emphasizes the disincentive to independence due

to the potential loss of a metropole’s trade with the colony Bonfatti (2010).

Finally, by assembling novel data, which includes, to the best of our knowledge, the first

comprehensive assembly of archival intelligence data on the extent of non-violent and violent

insurrection in the war-time Quit India rebellion, we contribute to Indian history. The two

major strands of existing Indian historiography emphasize either the metropole’s reasons

for granting India independence (see, e.g., the Transfer of Power series published by the

U.K. government—Mansergh (1976)), or provide thick description of the micro-politics of

the movement in India (see the Towards Freedom series published by the Indian Council

for Historical Research—Gupta, ed (2010), Prasad, ed (2008), Panikkar, ed (2009), Gupta

and Dev, eds (2010)). These literatures, respectively, mention the Great Depression as a

9India’s independence, on the hand, is often said to have inspired other anti-colonial movements (Rother-mund, 2006).

7

Page 9: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

factor weakening Britain’s will to rule India, and as a cause of a “peasant movement” in

the inter-war years, which provided the elite-led independence movement with the masses

it needed (Rothermund, 1992, 2006). We are able to test the latter claim empirically, and

find it incomplete as an explanation. Instead, we are able to propose and begin to test a

novel interpretation, based upon on the political economy of India’s trade, to explain not

only one of the pivotal historical episodes in the political and economic destinies of one-fifth

of the world’s population, but also why and how there was a mass mobilization in favor of

democratic self-determination that has since served as a central example to freedom struggles

around the world.

We start by outlining our alternative account of the Indian Independence movement.

The next section details the unique data and empirical strategy that we rely on. We then

present our results, and conclude.

An account of the Indian independence movement

The leading organization of the Indian independence movement—the Indian National Congress—

was founded in 1885, 30 years after Britain began its direct rule of the subcontinent. For

much of its pre-Independence history, the movement was financed and dominated by rich

professionals—mainly lawyers and businessmen—who made their living largely from India’s

triangular trade with Britain and China. These elites pushed for greater self-government

within the British Empire. In the early-1920s, the Independence movement still was—despite

its recent expansion under Gandhi, who had returned from South Africa in 1915—largely a

narrow, elite-led one, occasionally derided as a “talking shop.” By 1935, the movement had

transformed itself into a mass movement aiming for complete independence. The transforma-

tion was so substantial that independence appeared achievable by the end of the decade, with

World War II delaying this outcome. In this paper, we concern ourselves with the impact of

exogenous trade shocks in the transformation of the Indian independence movement.

8

Page 10: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

The reasons for the broad-basing and change in aim of the Indian independence movement

were many, but most historical accounts highlight two factors—the impact of the Indian Na-

tional Congress’s strategic campaigns, particularly under Gandhi’s leadership, and the great

economic tumult of the inter-war period, which reached its nadir in the Great Depression.10

We focus on the latter, partly because Gandhi’s efforts were explicitly conditioned on eco-

nomic factors, and were therefore endogenous to the economic situation.

The 1920s were tumultuous for the world economy, and its boom and busts severely

tested the world. Until that time, Britain’s stewardship of Indian trade policy had brought

with it an openness to trade that India would not see again at least until the 1990s. 1923 is

considered the last “business as usual” year under the broadly free trade regime that India

had become accustomed to as a colony of the United Kingdom (Appleyard, 1968, 2006). A

series of questionable policies followed, beginning with the United Kingdom’s return to the

gold standard at pre-war (and now, overvalued) levels in 1925. This substantially reduced

India’s exports to Great Britain and the world, a contraction that was compounded by the

Great Depression, which started in 1929. An indication of the economic tumult of the time

comes from the the total value of imports into the United Kingdom from British India:

these nearly halved from £67 million in 1923 to £37 million in 1931 (see also Figure 2). The

contraction in India’s external trade affected practically every sector of the Indian economy,

and, as we will show, the dynamics of the independence movement as well.

The negative effect of this tumult was exacerbated by the Raj’s external-sector responses,

which reflected Britain’s economic and security imperatives more than India’s needs.11 The

first of these responses had to do with exchange rate. Britain abandoned the gold standard in

September 1931, effectively devaluing the pound, while at the same insisting that the rupee

remain pegged to sterling at its existing high value.12 This allowed Britain to reflate its

10Metcalf and Metcalf (2002), which barely discusses the economic dimension, is perhaps an exception.11Rothermund (1992) provides a compelling account of the over-ruling of the Finance Member of the

colonial government based in India, George Schuster, in seeking a devaluation by the Secretary of State forIndia in London.

12This stands in contrast to the devaluations that the dominions of Australia and New Zealand were ableto pursue.

9

Page 11: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

economy—a policy that practically all the world followed—at the expense of India’s economy.

British exports to India were favored over India’s exports to the world, and a massive outflow

of gold from the country and to Britain followed. Existing deflationary pressures due to the

collapse in demand due to the Great Depression were, in effect, exacerbated by the Empire’s

exchange rate policy.

The second external-sector response to the Great Depression was an abandoning of free

trade. The 1931 “Ottawa Agreement” established “imperial preferences” between Britain

and her colonies. The Empire would operate as a preferential-trade zone, with the high tariffs

to non-members, and preferential ones for members. The agreement offered the British the

cover with which to extract low Indian import duties for 160 of its manufactures, while

agreeing to similar terms for a smaller number of Indian raw material exports (Rothermund,

1992)(p.147). While the former created opposition to Empire, the latter created—as we

detail below—new supporters of Empire.

British policy led to the segmentation of India’s populace into at least three distinct

groups, each of which reacted to the regime in different ways and for different reasons.

We consider each of these in turn, detailing how their interests were affected by the Great

Depression, the overvaluation of the rupee, and the Ottawa agreement. The first group were

India’s “protected exporters,” who received preferential access to British markets under the

terms of the Ottawa agreement. This group mainly exported those Indian commodities

that the British turned to when in Depression: drugs, tea, coffee and tobacco. These were

grown, perhaps not coincidentally, chiefly on British-owned plantations in India. Since this

group continued to do well during the inter-war years, they generally remained hostile to the

Congress party and its plans for independence.

The second group were India’s “unprotected exporters,” which included the bulk of the

population. This group included the producers of staples, such as wheat and rice, and of

export cash crops such as cotton, indigo and jute. This constituency suffered greatly in the

inter-war years, due to the fall in the demand for their products, which was exacerbated by

10

Page 12: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Britain’s decision to keep the rupee overvalued. As long as this group remained oriented

towards the export economy, its interests remained aligned with the British. Many farmers,

however, switched from growing for export to subsistence farming.13 By doing so, they

reduced their reliance on world demand, and, therefore, both the trade and extension services

provided by various intermediaries, including landlords, and the free-trade policy of the

British. The Congress party, we argue, seized upon the reduced enthusiasm of this group

for the Raj, and promised them land redistribution, from the now defunct landlord class.

Promises of land redistribution will have been made credible by the democratic franchise.14

While the peasants who switched to subsistence farming provided the labor of the in-

dependence movement, the movement also needed capital. This was provided by the third

group affected by turmoil of this period—the owners of India’s infant industries. India’s

“import substituters” always had strong incentives to wrest Britain’s control of India’s ex-

ternal policy from Britain, since they were provided little protection for much of Britain’s

rule. They were newly empowered due to the abrupt rise in demand for manufactures during

World War I, due to the country’s mobilization, and its needs to save foreign exchange. Their

grievances were also compounded in this period, due to rupee’s overvaluation in 1925, and

because of the Ottawa agreement, which instituted preferential tariffs on manufactures from

Britain. Both policies disadvantaged domestic manufacturers in their domestic market. The

only way to wrest control of such policies, was in fact, to sue for complete independence.

Indeed, it was as the Great Depression struck, on January 26th 1930—thenceforth celebrated

as Independence Day—that Congress abruptly changed its platform from self-government

within the British empire to Purna Swaraj (See Appendix).15

13We hope to assess the determinants of switching in the next version of the paper.14The Muslim League, the party that would come to rule Pakistan, was less broad-based, did not promise

land redistribution, and did not land up with a democracy, either. These accounts go some way to explainingthe differing regime trajectories of the two countries after independence. India might have remained ademocracy for much of the time since 1947 because the social basis of its founding party was broad, whilePakistan’s was narrow.

15Celebrations of India’s “Independence Day” would continue until 1947. Lord Mountbatten chose insteadAugust 15th as this was the anniversary of his greatest triumph—the surrender of Japan. Later January26th was rehabilitated as India’s Republic Day.

11

Page 13: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

A number of papers have pointed out that economic dislocation is oftentimes associated

with political participation, partially for expressive reasons, but also for instrumental rea-

sons, as people wish to do something to better their situation. Indeed negative economic

shocks have been seen as an instigator of peasant rebellion in India (Rothermund, 1992) and

increased social conflict more generally (e.g. Dal Bo and Dal Bo, 2004, Miguel, Satyanath

and Sergenti, 2004). Yet, we will provide evidence that the historical literature mistakenly

conflates the link between negative shocks, mobilization and support for democratic self-

determination. Districts that were worst hit by the Great Depression, while being more

politically active, were actually less likely to support the Independence movement. This

is entirely consistent with the intuition of classical trade theory: the autarkic platform of

the Independence movement did not make it the natural choice for labor.16 This is also

consistent with the account of the independence movement provided above: the hardest hit

districts were the ones that remained reliant on export markets. Those who switched to

subsistence will have cushioned their negative shock, will have thereby become less reliant

on the British, and will have therefore been free to support independence.

The argument that much of the political mobilization of the 1930s was not for the

Congress is unusual in Indian historiography. This is partly because there has been lit-

tle systematic quantitative analysis of pre-independence era mobilizations. Evidence for our

claims can, however, be seen in some aspects of the historical record. Explaining how the

alliance crafted in the fire of the depression came to be born, Bose and Jalal (1998) argues

the Congress was practically “pushed, by the pressures which the colonial state’s economic

policies were generating from below, into taking positions they might otherwise have wanted

to resist” (140).17 The Congress could either ride the wave of economic disaffection that

16Yet, other, possibly complementary, mechanisms that we are still in the process of testing may also beat play. For example, an increased need for relief from the incumbent government and landed intermediariesmay have led the worst hit to support local landlord parties rather than the Congress. Poverty may havealso enhanced risk aversion, thus favoring established interests. What we can distinguish is whether thepoor fail to coordinate due to a pure coordination dilemma (Kuran, 1991): while such an effect might affectviolent action, it would be less likely to influence voting under secret ballot, unless there was a possibility ofcollective punishments in the form of withholding of incumbent government relief.

17Rothermund (2006) discusses the forging of another coalition, between socialists and industrialists, that

12

Page 14: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

confronted it, or be subsumed by it. Although the Congress chose to ride the wave of

disaffection, and this changed its subsequent demands, which now included both sops for

agriculturalists and industry,18 the alliance between the elite (mainly import-substituters)

and non-elites (mainly unprotected exporters) remained fragile.19

This was, as pointed out previously, because there was a substantial disjuncture between

the interests of import substituters and unprotected exporters. While the first of these

favored protection from imports, the latter will have preferred, per Stolper-Samuelson, a

free trade regime so as to benefit from capital inflows (O’Rourke and Taylor, 2006, Stolper

and Samuelson, 1941). This disjuncture might also help explain a recurring puzzle of India’s

pre-independence politics, where Gandhi—sometimes with, and at other times without the

Congress’s backing—would call off their agitations against the wishes of the movement’s

rank and file. As Bose and Jalal (1998) note, the Congress was so uneasy with this alliance,

that the “the Gandhian Congress [was] ready to press the brakes, fearful of people running

ahead of the leadership and redefining the organization’s cherished goal of Swaraj” (140).

Though democratic self-determination might have made more credible the promise from the

industrial “capitalists” of the mass mobilization to the erstwhile agrarian exporters who

provided the “labor” to redistribute resources from the now-economically irrelevant landlord

intermediaries of India’s world trading past, the coalition remained an uneasy one.

also helped fashion the independence movement and the country’s post-1947 economic policies. He notesthat “debates on British currency policy added to an increasing awareness among Indian industrialists thatnationalism was their best bet. Import substitution behind tariff walls guaranteed by a national governmentwas the ideal which they pursued. In this way socialists like Jawaharlal Nehru and Indian capitalists wereable to find a common denominator. Both preferred a national interventionist state to a pseudo-liberalcolonial state” (259).

18Bose and Jalal (1998) note that “Five of Gandhi’s eleven demands . . . related to economic issues. His callfor the abolition of the salt tax and a reduction of the land-revenue demand by half were designed for India’peasant masses. On behalf of India industrial bourgeoisie Gandhi demanded protection for the indigenoustextile industry, reservations of coastal shipping for Indians . . . , and a reduction of the rupee-pound exchangerate .. to stimulate Indian exports” (149).

19The Congress’s need for large amounts of funds to sustain the mass movement extended even to main-taining Mahatma Gandhi’s asceticism. Congress President Sarojini Naidu famously asked Gandhi “if youknew, Bapuji, how much it costs to keep you in poverty.”

13

Page 15: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Data and empirical strategy

We seek to measure the effect of trade shocks due to the Great Depression and the institu-

tion of British protectionist “imperial preferences” on support or opposition to the Indian

National Congress, the main party of the Indian independence movement. The ideal compar-

ison would be to compare two districts with same levels of initial exposure to foreign trade

during the free trade regime of the 1920s, one of which received protection under “imperial

preferences” during the Great Depression, and one that did not. A third comparison cate-

gory are those districts which did not produce goods for export under free trade, and whose

producers were relatively insulated from the costs and benefits of imperial preferences.

Our benchmark specification will be cross-sectional regressions of the following form:

M1936,d = γ1V d1920−23 + γ2S

d1923−1933 +X ′ζ + εd (1)

where M are measures of mobilization, V d is the average value of export goods per worker

in a district between 1920 and 1923, S is the percentage shock to the value of export goods

per person in a district due to the Great Depression and the imperial preference regime,

X are controls including provincial fixed effects, εd are unobserved factors that may drive

mobilization that we assume to be independent between provinces but allow to be arbitrarily

correlated (clustered) within them, and d indexes administrative districts, which is the level

for our analysis.

We employ four new measures of colonial era mobilization in our analysis. One of these—

turnout during the 1937 elections—is a measure of overall mobilization. The other three—

Congress party support in the 1937 provincial elections, violent and non-violent political

activities during the Quit India “rebellion” of 1942, and Congress party membership in

1946—are measures of support for independence. The Congress Party membership data

were taken from the organization’s membership handbook; 1937 election data were taken

from the official election returns, and the Quit India data were drawn from a series of secret

14

Page 16: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

intelligence reports written by the British (please see the Data Appendix).

The initial value of export goods per worker in a district is calculated as follows:

V d1920−23 =

g

Vg,1920−23 × wdg

W Tg

(2)

where Vg,1920−23 provides the average c.i.f. value of British India exports to the UK in 1920-

23, g indexes all goods exported to the United Kingdom from British India appearing in

the Annual Statements of Foreign Trade of the United Kingdom for the relevant year, and d

indexes districts. wdg are those that work in the production of the good g in district d in 1931,

while W Tg is the total number of workers producing that good over all districts. Thus the

number of workers producing a good acts as a district-specific weight to changes in demand

for that good: those areas where relatively more workers are employed will be more affected

by changes in value.

Note that as we are looking at the 1931 figures on employment, we are capturing those

individuals who chose not to or were unable to adjust to the 1923-33 trade shock by switching

out of export-oriented professions or crops. In a “peasant rebellion” interpretation, the

ability to adjust should mitigate the estimated effect of the shock by lowering the demand

for mobilization among those groups who were able to adjust. Similarly, a demonstrated

unwillingness or inability to adjust should strengthen the effect of an extreme negative shock.

In contrast, if it is the case, as we argue, that it was those erstwhile exporters who could

adjust to domestic production that had their interests most aligned with industrial interests

and the promise of future redistribution, we should expect intermediate negative shocks to

have the most impact.20

We then calculate the percentage shock to the value of export goods per person in a

20The next iteration of this paper will examine the factor responses directly, by comparing the productionmix in 1923, prior to the Depression to the production mix thereafter.

15

Page 17: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

district due to the Great Depression and the imperial preference regime:

Sd1923−1933 =

V d1930−34 − V d

1920−23

V d1920−23

× 100 (3)

We use as our measure the change in the value of exports rather than just the world or

UK prices as this enables us to capture the changing export mix of goods in response to

world demand and the tariff regime, as well as giving us a measure that is intuitive: it is

the change in the average revenue product per worker in each district.21 V d can be broken

down into its component sectors (manufacturing, cash crops, staple crops, natural resources

etc) by doing the analogous calculation over the goods and producers in those sectors. The

Appendix provides details of which goods are assigned to which sector.

Our identification strategy rests on the assumption that the value (i.e. equilibrium price

and aggregate quantities) of UK imports from India are driven mainly by the fluctuations

in the pound, changes in world demand, and the broad tariff regime set in the Ottawa

agreement in 1931 favoring British manufactures, rather than by political mobilization by

individuals or groups within specific Indian districts.

The identification of the effects of the great depression is particularly plausible given that

we do not use district-specific price measures to construct our shock measures. We instead

use the c.i.f. value of imported goods from India into Britain for various goods multiplied by

district-specific production of those goods in 1931 to construct our shock measure. Thus we

are capturing those individuals who by 1931, had either chose not to or were unable to adjust

to the 1923-33 trade shock by switching out of export-oriented professions or crops. In a

“peasant rebellion” interpretation, the ability to adjust should mitigate the estimated effect

of the shock by lowering the demand for mobilization among those groups who were able to

adjust. Similarly, a demonstrated unwillingness or inability to adjust should strengthen the

effect of an extreme negative shock. In contrast, if it is the case, as we argue, that it was

21We also use price shocks as instruments for value shocks: though not precisely estimated in a number ofspecifications, we get results consistent in sign and magnitude. A key issue with these price shocks is thatthey do not account for changes in the basket of export goods.

16

Page 18: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

those erstwhile exporters who could adjust to domestic production that had their interests

most aligned with industrial interests and the promise of future redistribution, we should

expect intermediate negative shocks to have the most impact.

The fact that we use three independent measures of mobilization to support our argument

should increase confidence in our results.Our regressions also employ provincial fixed effects,

and therefore only leverage intra-provincial district variation in mobilization. We employ a

number of additional district-specific controls for our analysis. These vary depending on the

specific dependent variable considered, and are mentioned below, as we present the results

of our analysis.

Our key dependent, independent and control variables are summarized in Table 1. While

the average district in British India produced export goods worth around Rs. 1.1 per worker

in 1923, by 1933, the average Indian district suffered a 47.4% drop in the value of export goods

produced there, reflecting the general collapse of prices during the depression. Importantly

for our discussion, this mean value masks great variation: approximately 1/3 of the India’s

districts experienced net positive shocks during the depression, as the combination of imperial

preferences and the world demand rose for commodities such as cinchona and myrobalans

(for drugs), iron and steel, tin ore, oilseeds and oilnuts, spices and tobacco (Figures 4 and

6.)

Evidence

Figure 5 presents the raw relationship between export shocks until 1933 and the degree of

turnout in the 1937 elections. Separate local polynomial smooths are applied both above

and below a zero shock, i.e. for the winner and the loser districts from the Great Depression

and the imperial preference regime. Notice that the figure appears, at first, to confirm the

perspective of historians that the Great Depression led to mobilization by a ‘peasantry’

pushed to protest and rebel by the extreme negative shocks of the Depression and imperial

17

Page 19: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

policy. The residents of districts that suffered greater negative shocks to the value of their

export goods appears to be somewhat more likely to turnout in the elections.

However, Figure 7 suggests that this account is incomplete. The Figure presents the

relationship between export shocks until 1933 and the vote share of the Congress party in

the 1937 elections. Notice that the shock data are bimodally-distributed above and below

zero. Further, there is a concave relationship between the export shock and the Congress

Party vote share, with support for Congress attaining a maximum (of around a 60% vote

share) with a negative shock to the value of export goods in the district of around 30%. In

contrast, districts that suffered greater negative shocks were actually less likely to support

the Congress. There is also a sharp drop off in support for Congress among the “winners”

from the imperial preference regime, as the positive shock rises.

These patterns suggest that those worst hit by the Depression, particularly those who had

failed to change their factors away from exportables,was not coordinated into support for the

opposition. This is consistent with the lack of attraction that Congress’ autarkic platform

might yield to those who could not substitute easily away from export goods. Instead of being

a rebellion of those facing the hardest times, support for Congress came from intermediate

districts that were relatively insulated from the Depression shock or able to adjust relatively

easily to domestic production. Further, the introduction of imperial preferences appears to

have led to a new constituency of beneficiaries from imperial preferences who subsequently

also voted against the Congress.

Before we show that these patterns are robust to multivariate analysis, it is worth consid-

ering why we use Congress support as our measure of support for independence. We make

two points here.First, there is arguably some basis for the stance taken by the Congress that

since the nationalist movement needed to put up a united front against the British, votes

for non-Congress parties were essentially votes against independence. Second, other than

the Muslim League—which has limited electoral support for much of the period that we

are considering—most other parties were local parties that did not take a view on national

18

Page 20: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

issues.22 This was the case since, all the way until 1947, Indian legislation only allowed for

electoral competition at the local level, which created parties focused on local issues. The

Congress’ focus on the national question was unusual in this regard, and stemmed from the

fact that it was a national movement that was beginning to compete in elections.

Given this discussion, we retain Congress party support as our dependent variable, and

proceed with the multivariate analysis. Consider first the analysis of the effects of the

depression on the 1937 elections. Table 2 presents an analysis of the determinants of voter

turnout during these elections, and Table 3 presents the results of voter support for the

Congress party.The dependent variables are presented as a % of the total eligible votes, and

total votes polled, respectively.All regressions control for provincial fixed effects, and employ

standard errors clustered at the provincial level.

Table 2 examines the determinants of percentage of eligible voters turning out to vote

during the 1937 elections. Notice first that, consistent with Figure 5 there is a weak, non-

robust negative relationship between the export shock and turnout (1-5), which once again

may appear at first to confirm the “Peasant Rebellion” view of the Great Depression and

the mass movement for Independence. However beneficiaries from the export shock are also

somewhat more likely to turnout (columns 4-5, 6-7). Other factors that appear to influence

turnout are the land tenure system, with voters in districts with more owner-cultivators and

landless laborers much less likely to turn out to go to the polls (columns 3, 5, 6).

Table 3 suggests, however, that this weakly increased mobilization in adversely affected

districts did not actually manifest itself in greater votes for the party of rebellion and inde-

pendence, the Congress.23 Notice first that, consistent with the raw data in Figure 7, there

22Many parties consisted of landlords and local elites, mobilized around local issues. Exceptions includevarious Communist groups, who had Soviet backing, and the Unionist Party of Punjab, who favored continuedties to Britain.

23The official election report for the 1937 election, tabled in Britain’s House of Commons, only notesthe votes received by winner and runner up candidates and their partisan affiliation. The Congress votereceived variable is calculated from this, and is therefore properly defined as the % of the votes received bythe Congress party in districts where there was at least one constituency where the party was the winner orrunner-up. This is an underestimate of the true Congress vote share, since it excludes the votes received byCongress candidates if they were not in the top two candidates. We drop the 18 districts where no Congresscandidate was the winner or runner-up.

19

Page 21: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

is a robust inverted-U relationship between the export shock and the Congress vote share,

implying that support for Congress was maximised in districts which lost around 40% of

the value of their goods during the Depression (Cols 1-8). The partial residual plot for the

regression in column 7, displayed in Figure 8, is consistent with this analysis. This result is

robust to removing outlier exporter districts (column 2), controlling for the extent of employ-

ment in manufacturing, different types of land tenure, army recruitment and police presence

(columns 3, 4, 6) and for the extent of initial exports by sector (columns 4, 6, 8). The result

is also robust to controlling for the extent of turnout in the elections, which actually has a

negative effect on the vote share of Congress (columns 5-10).

Thus the accounts of historians that conflate mobilization with support for independence

may be missing an important piece of the puzzle. Those districts adversely affected by

the Depression did appear to mobilize more, however this mobilization did not appear to

favor Congress. Columns 7-10 explore the effect on Congress vote share of a positive trade

shock, parametrising this first as an interaction (columns 7, 8) and next by decomposing

the export shock in gains and losses (columns 9, 10).24 Notice that, again consistent with

Figure 7, those districts that experienced the most gains from the Great Depression and the

system of imperial preferences, and thus the inter-dependence with the United Kingdom,

were significantly less likely to vote for the party of decolonization and independence.

While various measures of land tenure do not appear to be major determinants of support

for Congress in the 1937 elections, perhaps because of the limited franchise, the proportion

of males employed in industry does appear to have had a robust positive effect. This is

consistent with the Congress platform that would have favored protection for industry against

the UK manufactures that received preferential treatment under the imperial preference

system.25

24The gain (loss) is calculated as: 0 if the shock is negative (positive) and the value of the shock otherwise.Thus: shock = gains - loss

25Further, the interaction between measure of males in industry and the export shock is also negative,suggesting that industrialized districts that were adversely affected by the shock were more likely to supportCongress (results not shown).

20

Page 22: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Table 4 examines the extent to which the change in interests due to the Great Depression

and the institution of imperial preferences persisted until the eve of Independence, using data

on primary party membership by district published by the All-India Congress Committee

in 1946. Notice that there are similar patterns to the 1937 elections—the most adversely

affected districts from the Great Depression, and those that gained from imperial preferences,

were both less likely to field paid-up party members (columns 6-10). By 1946, Congress

membership was greatest in districts that suffered around 20-30% losses to the value of their

exports. Congress membership was more prevalent in areas that had land tenure systems

that favored rentiers (non-cultivating landlords or tenants) and more landless laborers (see

also Figure 9).

A third measure of support for Congress can be found during the Quit India movement,

also known as the ‘Great Rebellion’ or the August Kranti, a violent uprising that took place

during 1942. Our Quit India dependent variable is a (log transformed) count of the number of

events—violent/non-violent, Gandhian/non-Gandhian etc.—listed in the British administra-

tion’s “Secret Reports” as having occurred in each district during the Quit India struggle.26

Quit India protests spread throughout the sub-continent, with Bengal, Bihar, Bombay, the

Central Provinces, Delhi, Madras, Sind and the North-West Frontier particularly affected

(Figure 11).

Quit India activity is a particularly condign measure for our analysis for two reasons.

First, the national Congress party leadership was detained the very day the action started.

And second, the country’s district administration practically collapsed in some parts of the

country. Both factors meant that the political activity that did occur at the time was mostly

spontaneous, unmediated by national leadership or British efforts to restore order. Indeed, as

Figure 10 suggests, with the arrest of the Congress leadership, non-violent civil disobedience

quickly gave way to violent rebellion. Though areas that had civil disobedience were also

likely to have violent rebellions, violence was particularly concentrated in export-intensive

26Using negative binomial or Poisson specification yield very consistent results (not shown).

21

Page 23: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

districts with zamindari (landlord) tenure systems (Figure 12 and Figure 4(a)).

As Table 5(1-5) reveals, Quit India protests once again show the inverted- U relationship

with our export shock, with falls both for gains and for large losses. Quit India protests

were also more likely both in districts more exposed to industry and in landlord districts.

Columns 6-16 decompose the Quit India relationship into violent and non-violent protests.

As Columns (6-10) reveal, export shocks show consistent, but not precisely estimated effects

on the incidence of non-violent civil disobedience. Non-violent protests was also more likely in

industrial districts. In contrast, as Columns (11-15) suggest, a much stronger relationship is

visible between export shocks and violent protest. In contrast to the acts of civil disobedience

and consistent with Figure 12 , violence was also more likely to occur in landlord districts.27

Table 6 examines particular types of violence in the Quit India rebellion– targeted at

public infrastructure (the railways), at property, and at records (particularly of taxes and

debts). Once again there is a broadly consistent picture: violence was less likely in districts

that had a positive export shock in this period, and more likely in areas that suffered a

negative shock. Once again, industrial districts were more likely to see additional incidents.

Property and records were more likely to be destroyed in landlord districts.28

Discussion and conclusions

We have argued that the Indian independence movement’s aims and dynamics were shaped

by the large trade shocks of the inter-war years.In the first large-n analysis of the subna-

tional variation in overall and pro-Congress mobilization, we have shown that the regions

of India that experienced the largest negative shocks were—in keeping with standard his-

torical accounts—somewhat more likely to turnout in India’s first large-scale (provincial)

27This outbreak of violent conflict also seems consistent with the negative legacy of landlord areas notedby Banerjee and Iyer (2005).

28We, of course, have an ecological inference problem. While we have shown that districts that are subjectto greater shocks experienced less mobilization, we have not shown that the people who stayed home duringthe independence era mobilizations were truly the ones most affected either positively or negatively by theDepression. There is an important need for additional qualitative evidence to clarify this mechanism.

22

Page 24: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

elections of 1937. This result is fragile when subject to statistical tests, however. Further-

more, and contrary to the received wisdom, being subject to trade shocks is associated with

decreased support for the Congress in terms of votes received in 1937, party membership in

1946 and activity during the large-scale “Quit India” or Congress mobilization of 1942. We

have argued that these findings are consistent with standard Stolper-Samuelson logic: those

dependent on export markets will have remained committed to free trade, and, thereby, the

British.

The one-third of the country that experienced positive price movements in the inter-war

period also supported the British. Support for the Congress, on the other hand, was the

greatest amongst those who were moderately negatively affected by the depression. These

areas, as we have argued, cushioned the blow that they suffered in this period by switching

to subsistence farming, thereby reducing their reliance on free trade and Britain, which, in

turn, freed them up to vote for the Congress. Their support for the Congress was possibly

cemented by the promise of land redistribution from the country’s intermediaries. This,

in turn, might have been made credible through the extension of the democratic franchise.

While subsistence farmers provided the labor for the independence movement, industrialists,

who enjoyed the protection provided by the increase in customs duties implemented in this

period, provided the complementary capital needed for the movement.

While the political economy literature predicts the rise of the industrial classes in this

period, and the waning of the power of the peasants, it fails to provide an explanation

for the unusually encompassing nature of the Indian independence movement. We have

argued that the key to the independence movement was the complementary nature of the

coalition between the capital provided by the country’s capitalists, and the labor provided

by subsistence farmers. This was the coalition that won India her freedom, and it was the

coalition that would rule the country in the years to come.

Comparing the effects of the inter-war trade shocks on politics in other, similar regions

underlines the importance of trade shocks and the complementary role of capital and labor in

23

Page 25: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

making massive institutional change possible. In Latin America, the coalition that emerged

in response to the inter-war trade shocks was composed of both labor and capital from the

industrial sector. This differed from the coalition that emerged in India at the time, due

to the relatively small size of the industrial labor force in the country, and since India’s

peasants could produce for the domestic market. Brazil, for example, could not consume all

its sugarcane and coffee.

More generally, our study suggests a additional but neglected legacy of colonization. In

other states too, the forging of national parties of Independence that span broad groups

may displace traditional left-right or ethnic party competition in favor of strong, single-

party rule, with profound and lasting effects on the future direction of policymaking and

reform.29 As in India, trade policy in particular may be affected, as such parties may use

high tariff barriers to generate lobbying contributions that help buy and maintain single

party dominance (Milner and Mukherjee, 2011). South Asia’s struggle for independence has

long been an example for freedom struggles around the world. Yet there may yet be more

that it can teach us.

29A number of scholars have shown that founding elections set the patterns for subsequent political com-petition (Lipset and Rokkan, 1967, Wittenberg, 2006).

24

Page 26: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

References

Acemoglu, Daron and James A. Robinson, “Why did the West extend the Franchise?Democracy, inequality and growth in historical perspective,” Quarterly Journal of Eco-nomics, November 2000, 67, 585–608.

and , Economic origins of dictatorship and democracy, Cambridge,UK: CambridgeUniversity Press, 2005.

, Simon Johnson, and James Robinson, “Institutions as the fundamental cause oflong-run growth,” in Phillippe Aghion and Steven Durlauf, eds., Handbook of economicgrowth, North-Holland, 2005, chapter 6, pp. 385–472.

, , and , “The rise of Europe: Atlantic trade, institutional change and economicgrowth,” American Economic Review, June 2005.

Ahlquist, John S. and Erik Wibbels, “Riding the wave: trade, factor prices and politicalregimes,” mimeo, Duke, 2010.

Alejandro, Carlos Daz, “Latin America in the 1930s,” in Rosemary Thorp, ed., LatinAmerica in the 1930s: the role of the periphery in the world crisis, Oxford 1984, pp. 17–49.

Appleyard, Dennis, “The Terms of Trade between the United Kingdom and British India,1858-1947,” Economic Development and Cultural Change, April 2006, 54 (3), 635–654.

Appleyard, Dennis R., “Terms of Trade and Economic Development: A Case Study ofIndia,” American Economic Review, May 1968, 58, 188–99.

Banerjee, Abhijit and Lakshmi Iyer, “History, institutions and economic performance:the legacy of colonial land tenure systems in India,” American Economic Review, Septem-ber 2005, 95 (4), 1190–1213.

Bo, Ernesto Dal and Pedro Dal Bo, “Workers, warriors and criminals: social conflict ingeneral equilibrium,” 2004. mimeo, UC-Berkeley.

Boix, Carles, Democracy and Redistribution, Cambridge: Cambridge University Press,2003.

Bonfatti, Roberto, “Decolonization: the role of changing world factor endowments,” 2010.mimeo, LSE: STICERD.

Bose, Sugata and Ayesha Jalal, Modern South Asia: history, culture and political econ-omy, 2nd ed., London: Routledge, 1998.

Brubaker, Rogers, Nationalism Reframed: Nationhood and the national question in theNew Europe, Cambridge University Press, 1996.

Clayton, Anthony, The Wars of French Decolonization, London: Longman, 1994.

Eichengreen, Barry and David Leblang, “Democracy and globalization,” Economicsand Politics, 2008, (3), 289–334.

Engels, Friedrich and Karl Marx, The Communist Manifesto 1848.

Engerman, Stanley L. and Kenneth L. Sokoloff, “Institutions, factor endowments andpaths of development in the New World,” Journal of Economic Perspectives, 2000, 14 (3),217–32.

25

Page 27: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Esteban, Joan and Debraj Ray, “On the salience of ethnic conflict,” American EconomicReview, 2008, 98 (5), 2185–2202.

Frieden, Jeffry, Global Capitalism: It’s Fall and Rise in the Twentieth Century, New York:Norton, 2006.

Gupta, Amit Kumar and Arjun Dev, eds, Towards Freedom: Documents on the move-ment for Independence in India, 1941, New Delhi: ICHR and Oxford University Press,2010.

Gupta, Partha Sarathi, ed., Towards Freedom: Documents on the movement for Inde-pendence in India, 1943-1944, New Delhi: ICHR and Oxford University Press, 2010.

Hailey, Lord, The Future of Colonial Peoples, London: Oxford University Press, 1943.

Hiscox, Michael J., International Trade and Political Conflict, Princeton, NJ: PrincetonUniversity Press, 2002.

Jha, Saumitra, “Shares, coalition formation and political development: evidence from17th century England,” GSB Research Paper 2005, Stanford Graduate School of Business,Stanford CA August 2008.

, “Sharing the Future: Financial Innovators and Innovation in Solving the Political Econ-omy Challenges of Development,” in Timur Kuran and Pranab Bardhan, eds., Institutionsand Development, Proceedings of the International Economic Association 2011.

Kranton, Rachel and Anand V. Swamy, “Contracts, Hold-Up and Exports: Textilesand Opium in Colonial India,” American Economic Review, June 2008, 98 (3), 967–989.

Kuran, Timur, “Now out of Never: The Element of Surprise in the East European Revo-lution of 1989,” World Politics, 1991, 44, 7–48.

Lawrence, Adria, Imperial Rule and the Politics of Nationalism, University of Chicago,2007.

Lipset, Seymour Martin, Political Man: the Social Bases of Politics, Johns HopkinsUniversity Press, 1960.

and Stein Rokkan, Cleavage Structures, Party Systems, and Voter Alignments: AnIntroduction, New York: Free Press, 1967.

Lopez-Cordova, J. Ernesto and Christopher M. Meissner, “The Impact of Inter-national Trade on Democracy: A Long-Run Perspective,” World Politics, 2008, 60 (4),539–75.

Lustick, Ian, Unsettled States: Disputed Lands, Ithaca, NY: Cornell University Press, 1993.

Malaviya, H.D., Land Reforms in India, New Delhi: Economic and Political ResearchDepartment, All India Congress Committee, 1954.

Mansergh, Nicholas, The Transfer of Power 1942-47, London: Her Majesty’s StationeryOffice, 1976.

Metcalf, Barbara D. and Thomas R. Metcalf, A Concise History Of India, Cambridge:Cambridge University Press, 2002.

Miguel, Edward, Shanker Satyanath, and Ernest Sergenti, “Economic shocks andcivil conflict: an instrumental variables approach,” Journal of Political Economy, 2004,112 (4), 725–754.

26

Page 28: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Milner, Helen V. and Bumba Mukherjee, “Democratization and Economic Globaliza-tion,” Annual Review of Political Science, 2009, 12, 163–181.

and , “Democracy and Trade Policy in Developing Countries: Particularism and Do-mestic Politics with a Case Study of India,” in “Globalization, Democracy and TradePolicy in Developing Countries” 2011.

Moore, Barrington, Social origins of dictatorship and democracy: lord and peasant in themaking of the modern world, 1993 edition ed., Boston: Beacon, 1966.

North, Douglass, John Wallis, and Barry Weingast, Violence and social orders: a con-ceptual framework for interpreting recorded human history, Cambridge University Press,2009.

O’Rourke, Kevin H. and Alan M. Taylor, “Democracy and Protectionism,” workingpaper 12250, NBER 2006.

Panikkar, K.N., ed., Towards Freedom: Documents on the movement for Independence inIndia, 1940, ICHR and Oxford University Press, 2009.

Prasad, Bimal, ed., Towards Freedom: Documents on the movement for Independence inIndia, 1945, ICHR and Oxford University Press, 2008.

Rajan, Raghuram G., “The persistence of underdevelopment: constituencies and com-petitive rent preservation,” December 2006. manuscript.

Rogowski, Ronald, Commerce and Coalitions: How Trade Affects Domestic PoliticalAlignments, Princeton, NJ: Princeton University Press, 1990.

Rothermund, Dietmar, India in the Great Depression, 1929-1939, New Delhi: ManoharPublications, 1992.

, The Routledge Companion to Decolonization, Routledge, 2006.

Stolper, Wolfgang F. and Paul A. Samuelson, “Protection and Real Wages,” TheReview of Economic Studies, 1941, 9 (1), 58–73.

Wittenberg, Jason, Crucibles of Political Loyalty: Church Institutions and Electoral Con-tinuity in Hungary, New York: Cambridge University Press, 2006.

27

Page 29: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Pledge taken by the Indian National Congress at La-

hore, 26th January 1930.

We believe that it is the inalienable right of the Indian people, as of any other people, tohave freedom and to enjoy the fruits of their toil and have the necessities of life, so thatthey may have full opportunities of growth. We believe also that if any government deprivesa people of these rights and oppresses them, the people have a further right to alter it orto abolish it. The British government in India has not only deprived the Indian people oftheir freedom but has based itself on the exploitation of the masses, and has ruined Indiaeconomically, politically, culturally, and spiritually. We believe, therefore, that India mustsever the British connection and attain Purna Swaraj, or complete independence.

India has been ruined economically. The revenue derived from our people is out of allproportion to our income. Our average income is seven pice (less than two pence) perday, and of the heavy taxes we pay 20% are raised from the land revenue derived from thepeasantry and 3% from the salt tax, which falls most heavily on the poor.

Village industries, such as hand-spinning, have been destroyed, leaving the peasantry idlefor at least four months in the year, and dulling their intellect for want of handicrafts, andnothing has been substituted, as in other countries, for the crafts thus destroyed.

Customs and currency have been so manipulated as to bring further burdens on thepeasantry. British manufactured goods constitute the bulk of our imports. Customs dutiesbetray partiality for British manufacturers, and revenue from them is used not to lessen theburden on the masses but for sustaining a highly extravagant administration. Still morearbitrary has been the manipulation of the exchange ratio which has resulted in millionsbeing drained away from the country.

Politically, India’s status has never been so reduced as under the British regime. Noreforms have given real political power to the people. The tallest of us have to bend beforeforeign authority. The rights of free expression of opinion and free association have beendenied us, and many of our countrymen are compelled to live in exile abroad and cannotreturn to their homes. All administrative talent is killed and the masses have to be satisfiedwith petty village offices and clerkships.

Culturally, the system of education has torn us from our moorings and our training hasmade us hug the very chains that bind us.

Spiritually, compulsory disarmament has made us unmanly, and the presence of an alienarmy of occupation, employed with deadly effect to crush in us the spirit of resistance,has made us think that we cannot look after ourselves or put up a defence against foreignaggression, or even defend our brothers and families from the attacks of thieves, robbers,and miscreants.

We hold it to be a crime against man and God to submit any longer to a rule that hascaused this four-fold disaster to our country. We recognise, however, that the most effectiveway of getting our freedom is not through violence. We will therefore prepare ourselves bywithdrawing, so far as we can, all voluntary association from the British Government, andwill prepare for Civil Disobedience, including non-payment of taxes. We are convinced that

28

Page 30: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

if we can but withdraw our voluntary help and stop payment of taxes without doing violence,even under provocation, the end of his inhuman rule is assured. We therefore hereby solemnlyresolve to carry out the Congress instructions issued from time to time for the purpose ofestablishing Purna Swaraj.

Appendix A of ‘Towards freedom: The autobiography of Jawaharlal Nehru’.

Data Appendix

We detail the construction of our key dependent and independent variables here.

1937 election data

For each of British India’s 1,046 constituencies, we entered data on the following fields fromthe official election returns (Secretary of State for India to Parliament 1937): total votespolled, votes polled and party affiliation for the winning candidate, the size of the electorate,the total number of candidates that ran for office, the number of the seats (while 82% ofconstituencies were single-member seats, the rest had 2-4 members), and a variable indicatingthe type of constituency (general, general-urban, general-rural, reserved for scheduled castes,Muslims, Sikhs, Christian, Anglo-Indians, and some other small categories).

To collapse these data to the district level, we first mapped each constituency to anadministrative district or districts using the 1935 delimitation report (Secretary of State forIndia to Parliament 1936). In the 12% of instances where constituencies spanned districts,we divided the variables evenly between the districts. We then summed the variables acrossthe 199 districts of British India.

1942 Quit India data

These data are based on a series of secret reports written by the administration in responseto the Quit India agitations (Government of Bengal 1943, Government of Berar 1943, Gov-ernment of Bihar 1944, Government of India 1943a-h, Government of Madras 1943, Govern-ment of the United Provinces 1943). The reports provide detailed (often daily) accounts ofQuit India-related events. The Quit India dependent variable that we employ is the (log-transformed) count of the following events, between August and December 1942: violence,property damage, strikes, meetings, civil disobedience activities, and resignations.

1946 Congress primary membership data

These were obtained from a Congress Party handbook (All India Congress Committee 1946).Primary party members were required to pay an annual membership fee of four annas (equiv-alent to one-fourth of a rupee) a year. This entitled them to vote in party elections if theyhad maintained membership for a year. Data are divided by 100,000 and log-transformed.

Trade and shock data

Please see body of the paper.

29

Page 31: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Data sources

All India Congress Committee. 1946. Congress Handbook. Allahabad.Government of Bengal. 1943. “District Officers’ Chronicles of Events of Disturbances

Consequent Upon the All-India Congress Committee’s Resolution of 8th August 1942 andthe Arrest of Congress Leaders Thereafter, August 1942 to the middle of March 1943.”Alipore: Bengal Government Press.

Government of Berar. 1943. “District Calendar of Events of Civil Disobedience Move-ment.” Nagpur: Government Printing, C.P. & Berar.

Government of Bihar. 1944. “Report on the Civil Disturbances in Bihar, 1942.” Patna:Government Printing, Bihar.

Government of India. 1943a. “Bombay: Six months of the Congress Movement.” NewDelhi: Government of India Press.

. 1943b. “A Brief Record of the Congress Movement, 1942-43, in the Province ofSind.” New Delhi: Government of India Press.

. 1943c. “Congress Disturbances in the N.-W.F.P, 1942-43.” New Delhi: Govern-ment of India Press.

. 1943d. “Congress Disturbances in the Punjab.” New Delhi: Government of IndiaPress.

. 1943e. “District Calendar of Events of the Congress Disturbances in Assam.” NewDelhi: Government of India Press.

. 1943f. “Disturbances at Delhi 1942: A Narrative Account.” New Delhi: Govern-ment of India Press.

. 1943g. “A Narrative Account of Congress Disturbances in Coorg.” New Delhi:Government of India Press.

. 1943h. “Narrative Account of Disturbances in Different Districts of the Provinceof Orissa, August-December 1942.” New Delhi: Government of India Press.

Government of Madras. 1943. “District Calendar of Events of the Civil DisobedienceMovement, August-December 1942.” Madras: Government Press.

Government of the United Provinces. 1943. “The Congress Rebellion in the UnitedProvinces, 1942.” Lucknow: Government Branch Press.

Secretary of State for India to Parliament. 1936. “Government of India Act 1935:Report of the Committee appointed in connection with the Delimitation of Constituenciesand connected matters.” Command paper 5,100. London: Her Majesty’s Stationery Office.

Secretary of State for India to Parliament. 1937. “Return Showing the Results of Elec-tions in India.” Command paper 5,589. London: His Majesty’s Stationery Office.

30

Page 32: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

0.2

.4.6

Pr(

pers

on li

ves

in a

col

ony)

1800 1850 1900 1950 2000Year

Source: Own calculations based on Cross-National Time-Series Data Archive.

Figure 1: World trends in decolonizationThe vertical line marks the independence of India and Pakistan in 1947.

050

010

0015

0020

0025

00

1900 1910 1920 1930 1940 1950year

Imports-British Empire, Rs. Mils Exports-British Empire, Rs. Mils

Figure 2: India’s trade with the British EmpireSource: Mitchell: Historical Statistics

31

Page 33: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

.6.7

.8.9

11.

1

1910 1920 1930 1940Year

Acres Food Crops (Prop of1929) Non-Food Crops

Figure 3: Changes in food vs non-food crop acreageSource: Agricultural Censuses, 1929-1935

32

Page 34: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

-100

-50

050

% c

hang

e in

val

. exp

ort g

oods

pro

duce

d in

dis

trict

, 193

3-19

23

0 10 20 30 40Rs.val. export goods produced per cap., 1920-23

(a) All districts

-100

-50

050

% c

hang

e in

val

. exp

ort g

oods

pro

duce

d in

dis

trict

, 193

3-19

23

0 2 4 6Rs.val. export goods produced per cap., 1920-23

(b) Excluding districts with initial export goods >Rs.10 in value per capita

Figure 4: Initial exports and Depression shocksSource: Own calculations, based upon Annual Statements of Foreign Trade of the United Kingdom and

various Censuses of India33

Page 35: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

2040

6080

100

% T

urno

ut, 1

936

-100 -50 0 50% change in value of export goods in district, 1923-1933

Figure 5: Export shocks and % Turnout, 1937 electionsLocal polynomial smooths

34

Page 36: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Lege

ndIn

itial

Exp

ort V

alue

s, %

of T

otal

, (19

20-1

923

av)

initv

alto

t as

Per

cent

of T

otal

0% -

0.00

174%

0.00

175%

- 0.

0118

%

0.01

19%

- 0

.079

4%

0.07

95%

- 0.

18%

0.18

1% -

5.23

%

Nat

ive

Sta

tes

(a)Freetrade:

Averagevalueof

export

goodsper

producer,

%of

total,1920-23

Lege

ndEx

port

gai

ners

, 193

2-33

Exp

ort g

aine

rs, 1

932-

33

% c

hang

e in

val

exp

ort g

oods

, (19

23-1

933)

perc

vals

hkto

t-8

0.9

- -8

0.0

-79.

9 -

-60.

0

-59.

9 -

-40.

0

-39.

9 -

-20.

0

-19.

9 -

0.0

0.1

- 20.

0

20.1

- 40

.0

40.1

- 60

.0

(b)Im

perialpreferences:

%changein

valueofexportgoodsper

producer,

1923-33

Figure

6:W

inners

and

Losers

from

ImperialPreference

sand

theGreatDepression

Source:

Owncalculations,baseduponthe1931census,1931agriculturalcensusan

dvariouseditionsoftheAnnualStatemen

tofForeignTradeofthe

United

Kingdom

35

Page 37: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

020

4060

80%

Con

gres

s vo

te, 1

936

-100 -50 0 50% change in value of export goods in district, 1923-1933

Figure 7: Export shocks and % votes for Congress, 1937Local polynomial smooths

-30

-20

-10

010

20e(

% T

urno

ut, 1

936)

| X

-.4 -.2 0 .2 .4e(Pr. change exports/cap.) | X

-50

050

e(%

Con

gres

s vo

te, 1

936)

| X

-.4 -.2 0 .2 .4e(Pr. change exports/cap.) | X

-3-2

-10

12

e(Lo

g C

ongr

ess

Mem

bers

/100

,000

, 194

6) |

X

-.4 -.2 0 .2 .4e(Pr. change exports/cap.) | X

Figure 8: Partial residual plots

36

Page 38: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Lege

nd%

Con

gres

s vo

tes

1936

(qui

ntile

s)0.

00 -

12.0

6

12.0

7 - 2

2.83

22.8

4 - 4

5.67

45.6

8 - 6

3.33

63.3

4 - 8

8.07

Nat

ive

Stat

es

(a)1936elections:

%Congress

votes,

1936elections

Lege

ndC

ongr

ess

mem

bers

per

100

,000

(qui

ntile

s)

Nat

ive

Stat

es

(b)1946Congress

mem

bersper

100,000

Figure

9:Support

forCongress

priorto

Independence

Source:

Owncalculations,

baseduponofficialelectionreturnsandtheCongress

Party

mem

bership

handbook

1946

37

Page 39: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

020

4060

80N

umbe

r of e

vent

s

July 1 October 1 January 1 April 1 July 1 October 1

Civil disobedienceAttempted violence

Figure 10: Civil disobedience preceded violent protest in the Quit India “Rebel-lion” of 1942Source: Own calculations, based upon secret intelligence reports for each province.

LegendNative States

Total incidents, Quit India 1942 (deciles)

01 -

23 -

67 -

19

20 - 3

5

36 - 4

7

48 - 6

3

64 - 9

3

94 - 1

22

123 -

695

Figure 11: Incidents of protest during the Quit India “Rebellion” of 1942Protests include: violence, property damage, strikes, meetings, other civil disobedience activities and resig-

nations. Source: Own calculations, based upon secret intelligence reports for each province.

38

Page 40: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Lege

ndN

ativ

e St

ates

Non

-vio

lent

civ

il di

sobe

dien

ce,

Qui

t Ind

ia 1

942

(dec

iles)

0

1

2

3

4 - 6

7 - 11

12 - 1

516

- 18

19 - 2

4 25 - 1

32

(a)Incidents:CivilDisobedience,1942,Deciles

Lege

ndN

ativ

e St

ates

Viol

ent i

ncid

ents

, Qui

t Ind

ia 1

942

(dec

iles)

0

1

2

3 - 4

5 - 6

7 - 10

11 - 1

314

- 18

19 - 3

7 38 - 1

48

(b)Incidents:Violentprotest,1942,Deciles

Figure

12:In

cidents

ofpeace

fuland

violentpro

test

duringth

eQuit

India

“Rebellion”of1942

Source:

Owncalculations,

baseduponsecret

intelligence

reports

foreach

province.

39

Page 41: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Table 1: Summary Statistics

Variable Obs Mean Std. Dev. Losers GainersAll India

Congress membership per 100,000 459 9.7 16.4 12.6 2.9 ***Log. Congress membership per 100,000, 1946 459 1.3 1.5 1.7 0.4 ***Quit India event count 20 72.1 44.0 66.1 125.5Value export goods per worker, 1923 459 1.1 3.9 0.8 1.6Value export goods per worker- manufactures, 1923 459 0.2 0.3 0.2 0.2Value export goods per worker- natural resources, 1923 459 0.2 2.3 0.3 0.0 **Value export goods per worker- cash crops, 1923 459 0.6 3.3 0.2 1.5 **Value export goods per worker- staple crops, 1923 459 0.1 0.3 0.1 0.0 ***% change value export goods per capita, 1923-33 419 -32.0 32.6 -47.3 20.7 ***% gains: value export goods per capita, 1923-1933 419 4.6 10.0 0.0 20.7 ***% losses: value export goods per capita, 1923-1933 419 36.7 24.9 47.3 0.0 ***Gainer in value of export goods 472 0.3 0.5 0.0 1.0Log. Population, 1931 459 6.2 1.6 6.4 5.7 ***Population density, 100,000s/sqkm 446 0.3 2.1 0.2 0.7% Males in manufacturing industries, 1931 417 2.5 1.7 2.6 2.3% Males in agriculture, 1931 417 17.4 7.3 18.1 15.1 ***% Male non-cultivating landlords or tenants, 1931 417 0.5 0.7 0.5 0.4 **% Males owner-cultivators, 1931 417 5.3 5.5 5.6 4.6% Males unlanded agricultural labourers, 1931 417 3.7 3.7 4.0 2.5 ***Armymen per 100,000, 1931 417 1.5 6.2 1.8 0.7 **Police per 100,000, 1931 417 1.9 3.1 1.9 1.9Proportion Muslim 459 0.2 0.3 0.2 0.2 ***

British IndiaTurnout, % of eligible voters 204 56.7 12.5 57.1 52.2Congress vote, % of votes 188 43.7 23.8 44.2 39.3Number of candidates 204 16.4 9.7 16.3 18.0Number of seats 204 6.1 3.4 6.1 6.7Registered voters, 10,000s 204 13.5 10.1 13.7 11.5Congress membership per 100,000 203 19.1 18.6 19.5 15.2Log. Congress membership per 100,000, 1946 203 2.6 1.0 2.6 2.3Quit India event count 20 72.1 44.0 66.1 125.5Value export goods per worker, 1923 203 1.9 4.9 0.9 11.8 ***Value export goods per worker- manufactures, 1923 203 0.3 0.3 0.3 0.3Value export goods per worker- natural resources, 1923 203 0.2 1.5 0.3 0.0 *Value export goods per worker- cash crops, 1923 203 1.2 4.9 0.3 11.4 ***Value export goods per worker- staple crops, 1923 203 0.2 0.2 0.2 0.0 ***% change value export goods per capita, 1923-33 201 -47.4 22.5 -51.8 11.8 ***% gains: value export goods per capita, 1923-1933 201 0.8 3.3 0.0 11.8 ***% losses: value export goods per capita, 1923-1933 201 48.2 20.4 51.8 0.0 ***Gainer in value of export goods 204 0.1 0.3 0.0 1.0Log. Population, 1931 203 6.9 0.7 6.9 6.7Population density, 100,000s/sqkm 202 0.4 2.9 0.2 3.0% Males in manufacturing industries, 1931 200 2.7 1.7 2.8 1.6 ***% Males in agriculture, 1931 200 19.3 4.3 19.1 21.6 *% Male non-cultivating landlords or tenants, 1931 200 0.5 0.4 0.5 0.4% Males owner-cultivators, 1931 200 6.1 5.0 5.9 8.5% Males unlanded agricultural labourers, 1931 200 4.5 3.3 4.7 1.9 ***Armymen per 100,000, 1931 200 0.8 2.4 0.8 0.3Police per 100,000, 1931 200 1.5 1.2 1.5 1.1 **Proportion Muslim 203 0.2 0.3 0.2 0.2

Notes: *** p<0.01, ** p<0.05, * p<0.1 using two-sided difference in means Welch t-tests. Sources: Author's calculations. See text for details.

Mean

40

Page 42: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Table 2: Regression: % Turnout, 1937 elections

OLS with Native State / Province Fixed Effects (1) (2) (3) (4) (5) (6) (7)British

IndiaTrimming

ExportsBritish

IndiaBritish

IndiaBritish

IndiaBritish

IndiaBritish

IndiaValue export goods per worker, 1923 -0.516*** -1.656* -0.608*** -0.604** -0.432*** -0.679*** -0.658***

[0.119] [0.836] [0.134] [0.215] [0.139] [0.152] [0.113]Prop. change value export goods per capita -4.871 -9.391 -3.900 -34.493* -28.406*

[7.343] [7.173] [6.697] [15.870] [14.050]Prop. change value export goods per capita^2 -2.010 -7.216 -2.277 -30.954* -25.741*

[8.532] [8.595] [7.400] [16.762] [12.047]Gainer in value of export goods 10.171 15.392**

[6.058] [6.232]Gainer x % change in value 0.295 -0.584

[0.618] [0.567]% Gains: value export goods per cap., 1923-1933 0.274 0.041

[0.252] [0.227]% Losses: value export goods per cap., 1923-1933 0.047 0.024

[0.051] [0.055]% Males in manufacturing industries, 1931 -0.584 -0.640 -0.569

[0.721] [0.728] [0.719]% Males in agriculture, 1931 0.380 0.351 0.383

[0.337] [0.329] [0.337]% Male non-cultivating landlords or tenants, 1931 1.620 1.585 1.689

[2.157] [2.028] [2.105]% Males owner-cultivators, 1931 -0.828* -0.883** -0.828*

[0.398] [0.389] [0.397]% Males unlanded agricultural labourers, 1931 -0.544* -0.502* -0.543*

[0.259] [0.257] [0.266]Armymen per 100,000, 1931 -0.383 -0.364 -0.383

[0.442] [0.479] [0.438]Police per 100,000, 1931 -0.104 -0.009 -0.078

[0.835] [0.844] [0.847]Proportion Muslim 1.161 1.960 0.935

[3.849] [3.435] [3.632]Electoral controls Y Y Y Y Y Y YObservations 199 191 199 199 199 199 199R-squared 0.45 0.44 0.50 0.46 0.51 0.45 0.50

Robust standard errors in brackets, clustered at the Native State/ Province level. * significant at 10%; ** 5%; *** 1%; All regressions include controls for log. population 1931, population density.++: Electorate controls include: No of Candidates, No of Seats, No of Registered voters. Districts with 1923 export values per capita of Rs 10 are dropped in Col 2.

41

Page 43: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Tab

le3:

Regression:%

Congress

Vote

Share,1937

OLS

with

Nat

ive

Stat

e/ P

rovi

nce

Fixe

d Ef

fect

s(1

)(2

)(3

)(4

)(5

)(6

)(7

)(8

)(9

)(1

0)

Brit

ish

Indi

aTr

imm

ing

Expo

rtsB

ritis

hIn

dia

Brit

ish

Indi

aB

ritis

hIn

dia

Brit

ish

Indi

aB

ritis

hIn

dia

Brit

ish

Indi

aB

ritis

hIn

dia

Brit

ish

Indi

aV

alue

exp

ort g

oods

per

wor

ker,

1923

0.61

7*-0

.634

0.09

6 -16

.228

***

0.53

7-15

.704

***

1.17

0***

-15.

361*

**1.

087*

**-1

4.87

3***

[0.3

07]

[2.3

83]

[0.4

64]

[3.4

72]

[0.3

15]

[3.2

78]

[0.2

21]

[3.4

23]

[0.3

09]

[2.8

80]

Prop

. cha

nge

valu

e ex

port

good

s per

cap

ita-5

4.48

7***

-36.

107*

-41.

884*

-41.

936*

*-5

4.49

2***

-42.

576*

*-5

3.92

3*-3

9.80

8[1

3.34

0][1

9.43

0][2

1.28

8][1

7.37

2][1

4.29

6][1

7.10

4][2

7.20

0][3

4.88

1]Pr

op. c

hang

e va

lue

expo

rt go

ods p

er c

apita

^2-7

0.70

5***

-54.

737*

*-3

5.86

2-4

9.96

8*-7

0.76

6***

-51.

571*

-68.

661*

-47.

901

[14.

740]

[21.

569]

[25.

219]

[25.

271]

[16.

929]

[25.

144]

[33.

006]

[42.

755]

Gai

ner i

n va

lue

of e

xpor

t goo

ds18

.501

18.4

07[1

2.49

1][1

6.26

4]G

aine

r x %

cha

nge

in v

alue

-2.1

89*

-2.3

37[1

.111

][1

.648

]%

Gai

ns: v

alue

exp

ort g

oods

per

cap

., 19

23-1

933

-2.3

66**

*-1

.892

***

[0.3

27]

[0.5

12]

% L

osse

s: v

alue

exp

ort g

oods

per

cap

., 19

23-1

933

-0.1

13-0

.06

[0.1

11]

[0.0

90]

% T

urno

ut-0

.367

**-0

.312

-0.3

83**

-0.3

41-0

.351

**-0

.307

[0.1

37]

[0.2

04]

[0.1

38]

[0.2

13]

[0.1

40]

[0.2

04]

% M

ales

in m

anuf

actu

ring

indu

strie

s, 19

314.

433*

2.76

7*2.

690*

2.71

5*2.

777*

[2.4

49]

[1.3

91]

[1.3

85]

[1.4

09]

[1.3

65]

% M

ales

in a

gric

ultu

re, 1

931

0.76

10.

818

0.89

10.

992

1.03

2[0

.738

][0

.650

][0

.647

][0

.671

][0

.634

]%

Mal

e no

n-cu

ltiva

ting

land

lord

s or t

enan

ts, 1

931

2.11

23.

444

3.69

3.96

24.

136

[7.5

92]

[3.4

52]

[3.5

82]

[3.5

13]

[3.5

18]

% M

ales

ow

ner-

culti

vato

rs, 1

931

-0.4

6-0

.428

-0.5

92-0

.795

-0.7

75[0

.673

][0

.718

][0

.793

][0

.828

][0

.784

]%

Mal

es u

nlan

ded

agric

ultu

ral l

abou

rers

, 193

1-0

.344

-0.3

61-0

.479

-0.5

35-0

.587

[0.9

23]

[0.9

94]

[1.0

25]

[1.0

25]

[1.1

16]

Arm

ymen

per

100

,000

, 193

1-0

.838

-0.3

3-0

.679

-0.7

55-0

.646

[0.5

24]

[0.7

22]

[0.7

28]

[0.7

68]

[0.7

54]

Polic

e pe

r 100

,000

, 193

13.

312*

1.14

1.11

61.

389

1.15

6[1

.601

][1

.557

][1

.709

][1

.673

][1

.633

]Pr

opor

tion

Mus

lim-2

7.63

-30.

15-2

6.90

5-2

5.43

3-2

7.67

4[2

0.45

4][1

7.87

2][2

0.25

2][2

0.75

8][1

8.89

1]%

Exp

ort s

hock

impl

ying

max

imum

Con

gres

s sup

port

-0.3

85-0

.330

-0.5

78-0

.420

-0.3

85-0

.413

-0.3

93-0

.416

Con

trols

for i

nitia

l val

ue b

y se

ctor

+N

NN

YN

YN

YN

YEl

ecto

rate

con

trols

++Y

YY

YY

YY

YY

YO

bser

vatio

ns18

317

518

318

318

318

318

318

318

318

3R

-squ

ared

0.52

0.53

0.58

0.60

0.54

0.61

0.54

0.62

0.54

0.61

Rob

ust s

tand

ard

erro

rs in

bra

cket

s, cl

uste

red

at th

e N

ativ

e St

ate/

Pro

vinc

e le

vel.

* si

gnifi

cant

at 1

0%; *

* 5%

; ***

1%

; All

regr

essi

ons i

nclu

de c

ontro

ls fo

r log

. pop

ulat

ion

1931

, po

pula

tion

dens

ity.+

: sec

tors

incl

ude:

Man

ufac

ture

s, N

atur

al re

sour

ces,

Cas

h cr

ops a

nd S

tapl

e cr

ops,

1920

-23.

++

: Ele

ctor

ate

cont

rols

incl

ude:

No

of C

andi

date

s, N

o of

Sea

ts, N

o of

Reg

iste

red

vote

rs.

Dis

trict

s with

192

3 ex

port

valu

es p

er c

apita

of R

s 10

are

drop

ped

in C

ol 2

.

42

Page 44: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Tab

le4:

Regression:Log.Primary

Congress

Members,1946

OLS

with

Nat

ive

Stat

e/ P

rovi

nce

Fixe

d Ef

fect

s(1

)(2

)(3

)(4

)(5

)(6

)(7

)(8

)(9

)(1

0)

Full

sam

ple

Dro

ppin

gA

hmad

.Tr

imm

ing

expo

rtsD

ropp

ing

Ahm

ad.

Dro

ppin

gA

hmad

.Fu

llsa

mpl

eFu

llsa

mpl

eD

ropp

ing

Ahm

ad.

Full

sam

ple

Dro

ppin

gA

hmad

.V

alue

exp

ort g

oods

per

wor

ker,

1923

0.02

30.

023

0.05

80.

025*

-0.0

250.

019

0.02

1-0

.022

0.02

0-0

.021

[0.0

16]

[0.0

16]

[0.0

45]

[0.0

14]

[0.0

29]

[0.0

16]

[0.0

15]

[0.0

33]

[0.0

17]

[0.0

28]

Ph

lt

dit

043

9**

042

6**

045

8**

039

9**

041

6**

228

2**

224

9**

195

7***

Prop

. cha

nge

valu

e ex

port

good

s per

cap

ita-0

.439

**-0

.426

**-0

.458

**-0

.399

**-0

.416

**-2

.282

**-2

.249

**-1

.957

***

[0.1

87]

[0.1

90]

[0.1

86]

[0.1

89]

[0.1

77]

[0.8

75]

[0.8

68]

[0.7

20]

Prop

. cha

nge

valu

e ex

port

good

s per

cap

ita^2

-1.1

69**

*-1

.091

***

-1.1

70**

*-0

.990

***

-1.0

43**

*-3

.255

***

-3.1

59**

*-2

.761

***

[0.3

83]

[0.3

92]

[0.3

94]

[0.3

20]

[0.3

23]

[1.0

51]

[1.0

18]

[0.8

66]

Gai

ner i

n va

lue

of e

xpor

t goo

ds0.

172

0.17

30.

127

[0.1

71]

[0.1

75]

[0.1

95]

Gai

ner x

% c

hang

e in

val

ue0.

035*

*0.

033*

*0.

029*

*[0

.014

][0

.013

][0

.012

]%

Gai

ns: v

alue

exp

ort g

oods

per

cap

., 19

23-1

933

-0.0

08**

-0.0

07**

[0.0

04]

[0.0

03]

% L

osse

s: v

alue

exp

ort g

oods

per

cap

., 19

23-1

933

-0.0

04-0

.002

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

% M

ales

in m

anuf

actu

ring

indu

strie

s, 19

310.

075

0.07

80.

076

0.07

9[0

.048

][0

.059

][0

.060

][0

.064

]%

Mal

es in

agr

icul

ture

, 193

1-0

.007

-0.0

07-0

.009

-0.0

08[0

.011

][0

.010

][0

.010

][0

.010

]%

Mal

e no

n-cu

ltiva

ting

land

lord

s or t

enan

ts, 1

931

0.09

4**

0.08

7*0.

079*

0.09

3**

[004

7][0

043]

[004

3][0

046]

[0.0

47]

[0.0

43]

[0.0

43]

[0.0

46]

% M

ales

ow

ner-

culti

vato

rs, 1

931

0.01

10.

012

0.01

30.

009

[0.0

14]

[0.0

13]

[0.0

14]

[0.0

13]

% M

ales

unl

ande

d ag

ricul

tura

l lab

oure

rs, 1

931

0.02

3**

0.02

4**

0.02

7**

0.02

5**

[0.0

11]

[0.0

12]

[0.0

12]

[0.0

12]

Arm

ymen

per

100

,000

, 193

1-0

.001

-0.0

01-0

.001

-0.0

02[0

005]

[000

5][0

005]

[000

5][0

.005

][0

.005

][0

.005

][0

.005

]Po

lice

per 1

00,0

00, 1

931

-0.0

41**

-0.0

41**

-0.0

38*

-0.0

42**

[0.0

18]

[0.0

19]

[0.0

20]

[0.0

18]

Prop

ortio

n M

uslim

-0.2

35-0

.214

-0.1

62-0

.298

[0.5

45]

[0.5

46]

[0.5

03]

[0.6

05]

% E

xpor

t sho

ck im

plyi

ng m

axim

um C

ongr

ess s

uppo

rt -0

.188

-0.1

95-0

.196

-0.2

02-0

.199

-0.3

51-0

.394

-0.3

54l

fi

iil

lb

Con

trols

for i

nitia

l val

ue b

y se

ctor

+N

NN

NY

NN

YN

YO

bser

vatio

ns40

540

439

640

440

441

740

540

441

740

4R

-squ

ared

0.82

0.83

0.83

0.83

0.83

0.83

0.83

0.84

0.82

0.83

Rob

ust s

tand

ard

erro

rs in

bra

cket

s, cl

uste

red

at th

e N

ativ

e St

ate/

Pro

vinc

e le

vel.

* si

gnifi

cant

at 1

0%; *

* 5%

; ***

1%

; All

regr

essi

ons i

nclu

de c

ontro

ls fo

r log

. pop

ulat

ion

1931

an

d po

pula

tion

dens

ity. +

: sec

tors

incl

ude:

Man

ufac

ture

s, N

atur

al re

sour

ces,

Cas

h cr

ops a

nd S

tapl

e cr

ops,

1920

-23.

Ahm

adab

ad- a

s loc

atio

n of

Gan

dhi's

ash

ram

at S

abar

mat

i w

as a

Con

gres

s hea

dqua

rters

, so

was

an

outli

er in

mem

bers

hip.

Dis

trict

s with

192

3 ex

port

valu

es p

er c

apita

of R

s 10

are

drop

ped

in C

ol 4

.g

q,

pp

pp

pp

43

Page 45: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Tab

le5:

Regression:Non-violentand

ViolentPro

testsin

theQuit

India

‘Rebellion’,1942

OLS

: Log

. Num

ber o

f inc

iden

ts

Full

sam

ple

Init.

Exp

ort

Sect

orC

ontro

ls

Trim

min

gEx

ports

Full

sam

ple

Full

sam

ple

Full

sam

ple

Init.

Exp

ort

Sect

orC

ontro

ls

Trim

min

gEx

ports

Full

sam

ple

Full

sam

ple

Full

sam

ple

Init.

Exp

ort

Sect

orC

ontro

ls

Trim

min

gEx

ports

Full

sam

ple

Full

sam

ple

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

(15)

Val

ue e

xpor

t goo

ds p

er w

orke

r, 19

23-0

.011

***

-0.0

40-0

.036

-0.0

08-0

.008

-0.0

030.

010

0.03

6-0

.001

-0.0

01-0

.017

-0.0

070.

046

-0.0

16-0

.016

[0.0

04]

[0.0

30]

[0.0

64]

[0.0

06]

[0.0

06]

[0.0

02]

[0.0

31]

[0.0

32]

[0.0

03]

[0.0

03]

[0.0

12]

[0.0

25]

[0.0

95]

[0.0

15]

[0.0

15]

Prop

. cha

nge

valu

e ex

port

good

s per

cap

ita-0

.242

*-0

.386

***

-0.2

06-0

.259

*-0

.083

-0.1

11**

-0.0

76-0

.099

*-0

.294

**-0

.346

***

-0.2

41**

-0.3

01**

[0.1

26]

[0.1

10]

[0.1

24]

[0.1

30]

[0.0

53]

[0.0

51]

[0.0

53]

[0.0

53]

[0.1

31]

[0.0

98]

[0.1

03]

[0.1

38]

Prop

. cha

nge

valu

e ex

port

good

s per

cap

ita^2

-1.1

30**

-1.1

23**

-1.1

34**

-0.9

91**

-0.4

09*

-0.4

41*

-0.3

71-0

.376

-1.2

93**

*-1

.287

***

-1.2

05**

*-1

.160

**[0

.459

][0

.428

][0

.455

][0

.474

][0

.236

][0

.251

][0

.221

][0

.229

][0

.432

][0

.435

][0

.440

][0

.477

]%

Gai

ns: v

alue

exp

ort g

oods

per

cap

ita, 1

923-

1933

-0.0

09**

-0.0

03-0

.009

**[0

.004

][0

.002

][0

.004

]%

Los

ses:

val

ue e

xpor

t goo

ds p

er c

apita

, 192

3-19

33-0

.005

*-0

.002

-0.0

05*

[0.0

03]

[0.0

01]

[0.0

03]

Log.

Pop

ulat

ion,

193

10.

066

0.07

1*0.

061

0.09

60.

10.

017

0.01

70.

009

0.01

90.

021

0.04

60.

050*

0.03

80.

081

0.08

5[0

.040

][0

.039

][0

.040

][0

.061

][0

.061

][0

.021

][0

.022

][0

.021

][0

.022

][0

.022

][0

.030

][0

.028

][0

.029

][0

.054

][0

.055

]Po

pula

tion

dens

ity, 1

00,0

00s/

sqkm

0.41

40.

402

0.40

70.

421

0.43

70.

210

0.21

00.

216

0.18

60.

191

0.35

90.

345

0.33

90.

390

0.40

7[0

.337

][0

.300

][0

.337

][0

.375

][0

.380

][0

.204

][0

.194

][0

.203

][0

.208

][0

.210

][0

.286

][0

.260

][0

.269

][0

.344

][0

.350

]%

Mal

es in

man

ufac

turin

g in

dust

ries,

1931

0.08

1***

0.08

3***

0.03

1*0.

031*

0.06

7*0.

069*

[0.0

28]

[0.0

27]

[0.0

17]

[0.0

17]

[0.0

36]

[0.0

35]

% M

ales

in a

gric

ultu

re, 1

931

-0.0

05-0

.005

-0.0

06-0

.006

0.00

00.

000

[0.0

13]

[0.0

13]

[0.0

08]

[0.0

08]

[0.0

11]

[0.0

11]

% M

ale

non-

culti

vatin

g la

ndlo

rds,

1931

0.08

6*0.

092*

*0.

039

0.04

10.

065*

0.07

3*[0

.043

][0

.043

][0

.030

][0

.031

][0

.035

][0

.037

]A

rmym

en p

er 1

00,0

00, 1

931

-0.0

03-0

.003

0.00

10.

001

-0.0

01-0

.001

[0.0

04]

[0.0

04]

[0.0

02]

[0.0

02]

[0.0

04]

[0.0

04]

Polic

e pe

r 100

,000

, 193

1-0

.010

-0.0

11-0

.005

-0.0

05-0

.005

-0.0

06[0

.008

][0

.008

][0

.005

][0

.005

][0

.008

][0

.008

]Pr

opor

tion

Mus

lim-0

.385

-0.4

240.

083

0.06

7-0

.501

-0.5

50[0

.321

][0

.293

][0

.159

][0

.162

][0

.557

][0

.520

]%

Exp

ort s

hock

impl

ying

max

imum

inci

dent

s-0

.107

-0.1

72-0

.091

-0.1

31-0

.101

-0.1

26-0

.102

-0.1

32-0

.114

-0.1

34-0

.145

-0.1

75Pr

ovin

ce /

Nat

ive

Stat

e Fi

xed

Effe

cts

YY

YY

YY

YY

YY

YY

YY

YO

bser

vatio

ns40

940

940

040

940

940

940

940

040

940

940

940

940

040

940

9R

-squ

ared

0.85

00.

860

0.85

00.

860

0.86

0.73

00.

730

0.73

00.

730

0.73

0.69

00.

700

0.70

00.

700

0.7

Rob

ust s

tand

ard

erro

rs, c

lust

ered

at N

ativ

e St

ate/

Prov

ince

leve

l.* si

gnifi

cant

at 1

0%; *

* 5%

; ***

1%

. A

ll re

gres

sion

s inc

lude

Pro

vinc

e / N

ativ

e St

ate

Fixe

d Ef

fect

s as w

ell a

s con

trols

for L

og. P

opul

atio

n 19

31 a

nd

Popu

latio

n D

ensi

ty. (

2,7,

12) i

nclu

de se

para

te c

ontro

ls fo

r val

ue o

f exp

ort g

oods

per

wor

ker i

n na

tura

l res

ourc

es, c

ash

crop

s,m

anuf

actu

res &

agr

icul

ture

. (3,

8,13

) trim

dis

trict

s with

> R

s 10

expo

rts p

er c

apita

A

ll In

cide

nts

N

on-v

iole

nt m

ass c

ivil

diso

bedi

ence

Vio

lent

mas

s pro

test

44

Page 46: Trade Shocks and pro-Democracy Mass Movements ...webfac/eichengreen/jha.pdfin the years immediately following India’s Independence.5 Thus trade shocks may have facilitated the formation

Tab

le6:

Regression:Deco

mposingViolentPro

testsin

theQuit

India

Rebellion,1942

OLS

: Log

. Num

ber o

f inc

iden

ts, Q

uit I

ndia

194

2(1

)(2

)(3

)(4

)(5

)(6

)(7

)(8

)(9

)(1

0)(1

1)(1

2)V

alue

exp

ort g

oods

per

wor

ker,

1923

-0.0

14-0

.082

***

0.03

5-0

.011

-0.0

19-0

.047

0.01

8-0

.016

-0.0

13**

-0.0

25-0

.037

-0.0

11[0

.010

][0

.023

][0

.056

][0

.009

][0

.013

][0

.042

][0

.068

][0

.014

][0

.005

][0

.035

][0

.069

][0

.007

]%

gai

ns: v

alue

exp

ort g

oods

per

cap

ita, 1

923-

1933

-0.0

07**

-0.0

08**

-0.0

06**

-0.0

07**

-0.0

08**

-0.0

09**

*-0

.007

**-0

.007

**-0

.008

**-0

.010

***

-0.0

08**

-0.0

08**

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

03]

[0.0

04]

[0.0

03]

[0.0

04]

[0.0

04]

% lo

sses

: val

ue e

xpor

t goo

ds p

er c

apita

, 192

3-19

33-0

.004

*-0

.003

-0.0

04*

-0.0

03-0

.004

*-0

.003

-0.0

05*

-0.0

03-0

.005

*-0

.004

-0.0

06*

-0.0

04[0

.002

][0

.002

][0

.002

][0

.002

][0

.002

][0

.002

][0

.003

][0

.003

][0

.003

][0

.003

][0

.003

][0

.003

]Lo

g. P

opul

atio

n, 1

931

0.05

1*0.

056*

*0.

036

0.07

5*0.

057

0.06

3*0.

043

0.09

20.

065*

0.07

0*0.

057

0.09

5[0

.027

][0

.027

][0

.024

][0

.043

][0

.034

][0

.034

][0

.030

][0

.058

][0

.038

][0

.037

][0

.038

][0

.059

]Po

pula

tion

dens

ity, 1

00,0

00s/

sqkm

0.09

0.07

30.

076

0.11

40.

392

0.37

40.

367

0.41

70.

387

0.37

30.

378

0.40

6[0

.105

][0

.072

][0

.090

][0

.097

][0

.329

][0

.280

][0

.309

][0

.353

][0

.320

][0

.277

][0

.318

][0

.355

]%

Mal

es in

man

ufac

turin

g in

dust

ries,

1931

0.07

2**

0.09

1**

0.07

5**

[0.0

28]

[0.0

45]

[0.0

30]

% M

ales

in a

gric

ultu

re, 1

931

0.00

2-0

.002

-0.0

03[0

.006

][0

.010

][0

.012

]%

Mal

e no

n-cu

ltiva

ting

land

lord

s, 19

310.

040.

086*

*0.

086*

*[0

.027

][0

.038

][0

.040

]A

rmym

en p

er 1

00,0

00, 1

931

-0.0

02-0

.003

-0.0

03[0

.002

][0

.004

][0

.004

]Po

lice

per 1

00,0

00, 1

931

-0.0

02-0

.011

-0.0

1[0

.007

][0

.009

][0

.008

]Pr

opor

tion

Mus

lim0.

014

-0.4

5-0

.423

[0.0

84]

[0.4

10]

[0.3

05]

Prov

ince

/ N

ativ

e St

ate

Fixe

d Ef

fect

sY

YY

YY

YY

YY

YY

YO

bser

vatio

ns40

940

940

040

940

940

940

040

940

940

940

040

9R

-squ

ared

0.59

0.62

0.6

0.6

0.79

0.8

0.79

0.8

0.85

0.86

0.85

0.85

Rob

ust s

tand

ard

erro

rs, c

lust

ered

at N

ativ

e St

ate/

Prov

ince

leve

l.* si

gnifi

cant

at 1

0%; *

* 5%

; ***

1%

. A

ll re

gres

sion

s inc

lude

Pro

vinc

e / N

ativ

e St

ate

Fixe

d Ef

fect

s as w

ell a

s con

trols

for L

og.

Popu

latio

n 19

31 a

nd P

opul

atio

n D

ensi

ty. (

2,6,

10) i

nclu

de se

para

te c

ontro

ls fo

r val

ue o

f exp

ort g

oods

per

wor

ker i

n na

tura

l res

ourc

es, c

ash

crop

s, m

anuf

actu

res &

agr

icul

ture

. (3,

7,11

) trim

di

stric

ts w

ith >

Rs 1

0 ex

ports

per

cap

ita

Des

truct

ion

of P

rope

rty D

estru

ctio

n of

Rai

lway

Infr

astru

ctur

e

D

estru

ctio

n of

Rec

ords

45