Podcast Summary: How Lives Change – Palanpur, India, and Development Economics
Podcast: LSE: Public Lectures and Events
Date: November 22, 2018
Host: LSE Film and Audio Team
Panelists: Nick Stern, Himanshu, Peter Lanjouw, Michael Lipton, Oriana Bandiera
Theme: Longitudinal village studies, economic development, poverty, inequality, mobility, and development economics, as revealed through decades-long research in Palanpur, Uttar Pradesh, India.
Overview
This episode explores "How Lives Change," the latest book and decades-spanning study on the north Indian village of Palanpur. The panel—authors and eminent discussants—dissects not just the village’s evolving fortunes, but how this unique longitudinal project illuminates key questions at the heart of development economics: growth, distribution, structural change, and the role of institutions and individual agency in mediating these forces. The session features rich narrative, quantitative findings, methodological debates, and critical reflections, offering a masterclass in village-level development research and its implications for economic thinking.
Key Discussion Points and Insights
1. The Scope and Spirit of the Palanpur Project
- Introduction (Nick Stern, 02:28–13:30):
- The Palanpur project is a "lifetime investment," running since the early 1950s/1970s, unique for its combination of deep qualitative and rigorous quantitative data.
- The central question: "How lives change"—focusing on the dynamics of growth, distribution, and structural change over time in the context of a single village.
- The project shows the importance of integrating "grand economic themes" with the granular microstructure—the institutions and behaviors at play.
- Notable for its methodological rigor: repeated detailed surveys roughly each decade, using mixed methods and returning to the same households and individuals.
“If you want to understand the Indian economy, you’d better understand villages because still…a big majority of the people live in villages in India.” – Nick Stern (09:25)
2. Evolution of Change in Palanpur
- Village Transformation (Himanshu, 13:30–24:05):
- First 30 years: Change mainly driven by the Green Revolution and advances in agriculture—especially irrigation and mechanization.
- Next 30 years: Unanticipated shift—non-farm activities, rural-urban integration, and access to external labor and credit markets became key for village advancement.
- Decline in poverty (from 85% to under 40%), increase in assets, but persistent poverty in income and dimensions like education and health.
- Differing impact on caste groups:
- Muraos (agricultural dominant): Benefited during Green Revolution, less so in recent decades.
- Jatabs (Scheduled Castes): Seized non-farm opportunities, saw dramatic improvements.
- Thakurs: Continued dominance, but with changing modes of influence and adaptation to new institutions.
- Social changes: Some improvement in education and women's status, but these remain limited. New forms of tenancy and labor contracts linked to shifts in village economic structure.
“The more things change, the more they remain the same.” – Himanshu (20:22)
3. Poverty, Inequality, and Mobility
- Distributive Trends (Peter Lanjouw, 24:05–36:29):
- Steady economic growth led to sharp poverty reductions but also a significant rise in inequality—especially pronounced in the last three decades.
- Inequality: Early periods had equalizing effects due to widespread access to irrigation (Green Revolution), but later, non-farm diversification generated new disparities.
- Mobility: Increasing over time, with both upward and downward movement among households; remarkable instances of movement across caste and income quintiles.
- Example: Telia (Muslim) household diversified into non-farm activities and rose in village rankings.
- But, paradoxically, intergenerational mobility has declined—a father's income is now a stronger predictor of a son's than before.
“It’s a story of economic growth, poverty decline… but also a story of increasing differences in relative standards of living…” – Peter Lanjouw (25:25)
4. Revisiting Development Economics Theory
- Challenging/Elaborating the Model (Nick Stern, 36:29–51:12):
- The Palanpur experience diverges from “dual economy” models in key ways:
- Commuting vs. migration: Workers often commute to nearby towns.
- Pluri-activity: Households maintain diverse income sources, rather than shifting from farm to non-farm wholesale.
- Information flows: The spread of mobile phones vastly amplified access to non-farm work and changed the nature of contracts and supervision.
- Interaction and endogeneity: New economic opportunities outside agriculture change social and institutional arrangements within the village.
- Entrepreneurship: Highly important, but marked more by individual heterogeneity than caste-determined advantage.
- The informal sector is expected to remain “normal” for the foreseeable future, driving opportunities but also perpetuating new inequalities.
- The Palanpur experience diverges from “dual economy” models in key ways:
“Informal is basically normal. And we have to be very careful…in policy terms, how far we push against informality. Informality eventually will move…But again, you know, you see in our own economies the gig economy in some ways moving away from formality.” – Nick Stern (40:50)
5. Methodological Reflection and Further Research
- Discussant Insights (Michael Lipton, 51:31–64:08):
- Praised the dataset: “longest, completest, and…best village analysis and data set that we've got…from anywhere.”
- Urged further hypothesis testing, comparative “gross village product” tables, and greater analysis of how population growth and agricultural output interact with welfare.
- Raised sustainability concerns: Is rapid agricultural growth (especially wheat and paddy double-cropping) leading to unsustainable “soil and water mining”?
- Technical note: Need to situate findings against broader Indian and district trends, careful with generalization from small-n (one-village) studies.
6. The Reality of Caste and Group Change
- Caste, Religion, and Economic Opportunities (Oriana Bandiera, 64:21–71:37):
- Analyzed income by caste, showing that the relative share of income by major castes declined, while Muslims (Telis) experienced a sharp rise in relative share in recent years—linked to entrepreneurship and lower population growth.
- Highlights the nuance: Change in overall village inequality does not simply map onto caste; individual factors and new opportunities matter.
- Added critical note on measurement: Consumption-based poverty measures may miss much of what matters for well-being and policy effectiveness.
- Personal anecdote: The Palanpur project has inspired multiple generations of economists by demonstrating the human, lived side of economics.
“If this can be economics, I can do economics.” – Oriana Bandiera (64:39)
7. Audience Questions & Panel Responses
Sample Q&A and Key Points (71:37–89:20):
- Malnutrition: Milk is a key but unequally accessible source of nutrition; loss of common grazing impacts poor disproportionately; PDS (Public Distribution System) and midday meals play an important role for the poor (78:21–82:11).
- Education: Rising demand and private supply, but so far, education confers limited economic advantage due to current job structures; its impact may grow as village integration and economic changes continue (78:21–82:11).
- Muslim Households: Recent upward mobility linked primarily to entrepreneurial individuals, not systematic group advantage; the story, while striking, is likely more idiosyncratic than generalizable (75:28–78:21).
- Environment: Water tables falling, soils at risk; expectation is things will get worse unless addressed (75:28–78:21).
- Methodological Cautions: Generalize stories, not literal statistics, to other settings; small-village studies are most valuable when their “logics” are plausible and echoed elsewhere (87:57–89:20).
“We tell stories about what happened in the village, and then we ask, do those stories resonate with the experience of other places?...It’s whether the stories that are told are plausible stories where they're in the data and whether other stories like that might be seen elsewhere.” – Nick Stern (88:15)
Notable Quotes & Memorable Moments
-
On Theory and Practice:
“If you want to understand the Indian economy, you’d better understand villages because still…a big majority of the people live in villages in India.”
— Nick Stern (09:25) -
On Change and Continuity:
“The more things change, the more they remain the same.”
— Himanshu (20:22) -
On Inequality’s Double Edge:
“It’s a story of economic growth, poverty decline… but also a story of increasing differences in relative standards of living…”
— Peter Lanjouw (25:25) -
On the Nature of Informal Work:
“Informal is basically normal...”
— Nick Stern (40:50) -
On Measurement and Well-being:
“If you measure poverty by what one actually eats versus what one can afford to eat, you get two very different answers… the policy implications are very different.”
— Oriana Bandiera (70:36) -
On the Inspirational Power of Village Studies:
“If this can be economics, I can do economics.”
— Oriana Bandiera (64:39)
Timestamps for Important Segments
- 00:00–02:28: Introduction and context
- 02:28–13:30: Nick Stern: Project background, data collection, framing questions
- 13:30–24:05: Himanshu: Main changes in Palanpur, agriculture & non-farm development
- 24:05–36:29: Peter Lanjouw: Poverty, inequality, mobility
- 36:29–51:12: Nick Stern: Lessons for development economics; methodological notes
- 51:31–64:08: Michael Lipton: Methodology, implications, sustainability, further research
- 64:21–71:37: Oriana Bandiera: Analysis by caste and religion, measurement concerns
- 71:37–89:20: Audience Q&A: Malnutrition, education, environment, policy, methodology
Conclusion
The Palanpur study remains an inspirational and substantive contribution to development economics—demonstrating how profound social and economic transformation can be measured, understood, and narrated through the lens of a single, “not-unusual” Indian village. The multiplicity of data, the commitment over decades, and the willingness to anchor economic theory in lived reality make this project vital for scholars, students, and policymakers alike. The episode lays out not just how lives change in Palanpur, but how the careful study of such change enriches the field of development economics itself.