Trade Shocks, Mass Mobilization and Decolonization: Evidence from India's Independence Struggle
Saumitra Jha, Associate Professor of Political Economy at Stanford University
A key challenge for development lies in generating broad coalitions in favor of reforms that span economic and ethnic divisions. The mobilization of India's remarkably diverse population in favour of independence---one of the first mass political movements and the first major reversal of colonization by Europeans since the early 19th century---provides an important historical example of a success. Using novel data, we find evidence that districts that were negatively impacted by the Great Depression and Britain's policy shift from free trade to an imperial preference regime favoring British manufactures 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, positive and extreme negative shocks in this period were associated with less, rather than more, support for Independence. We interpret our results as inconsistent with a ``peasant rebellion'' interpretation of India's independence and instead as reflecting the role of the Great Depression in aligning the incentives of South Asia's exporters with import substituters in favour of political independence, even while Imperial protectionism forged new pro-Empire constituencies.
Saumitra Jha is Assistant Professor of Political Economy at Stanford's Graduate School of Business. His research focuses on drawing new lessons from economic theory and history for fostering beneficial political reform and economic growth in developing societies. He is particularly interested in the role that can be played by financial and managerial innovations in encouraging cooperation, trade and peaceful co-existence between members of different ethnic, religious and social groups.