Irrigation agriculture and income redistribution

Abstract This paper advances the hypothesis and establishes empirically that the adoption of irrigation agriculture during the preindustrial era is a predictor of current cross-country differences in income redistribution. Countries whose populations historically relied on irrigation agriculture as their primary subsistence mode tend to exhibit lower levels of redistribution today, confirming that certain historical practices related to agriculture can have lasting effects on present-day outcomes. The research employs several empirical strategies to address concerns about the potential endogeneity of ancestral irrigation, including an instrumental variable approach that exploits cross-country variation in irrigation suitability. Furthermore, the results remain unaffected after controlling for an extensive set of geographic, historical and contemporary factors that may be correlated with both historical irrigation and redistribution. The analysis also reveals that the contribution of ancestral irrigation to income redistribution has partly operated through its impact on the individualistic-collectivist dimension of culture and political institutions.