“Rapid Institutional Change in Nepal’s Western Plains” by Eric Edmonds (JOINT BUSINESS & ECONOMICS SEMINAR)
Feudal institutions persist in many pockets of the developing world. In 2001, approximately 100,000 nearly landless laborers living in the western plains of Nepal served in debt-bondage to landowners, often for generations. We describe the institution, its persistence, and document its effects on the intergenerational persistence of poverty through the incentives the institution created for child labor, schooling, and fertility. By 2011, the institution and its disincentive effects on human capital accumulation appear to have completely disappeared. We consider alternative explanations for why the institution disappeared and the implications of this example for the evolution of traditional institutions elsewhere.