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I am grateful to Stephanie Cellini, Steve Haber, Wes Hartmann, Seema Jayachandran, Naomi Lamoreaux, seminar participants at Stanford, UC Berkeley, UCLA, and UC Riverside, and especially to the three anonymous referees and the editor of this Journal, Phil Hoffman, Ken Sokoloff, and Jean-Laurent Rosenthal for comments that substantially improved the article and the Hoover Institution for financial support through the National Fellows Program in 2006-2007. This article is dedicated to the memory of my late advisor, Ken Sokoloff for his enthusiastic support of this research.
In the nineteenth century, the East India Company and later, the British Crown introduced a new state system of education in British India.1 Beginning in 1858 the Crown via British administrators controlled education policy up until 1919, when education was transferred to the control of Indian ministers at the province level.2 Over this period, numerous acts were passed, various recommendations were made, and both public and private funds were used to expand and improve the public education system. However, the new system was unable to achieve mass literacy: there were fewer than three primary schools for every ten villages and less than 10 percent of the population was able to read and write by 1911.3
Why was there so little primary education in British India? One immediate explanation points to low public spending. Public investments in human capital in British India were among the lowest in the world and lagged behind other colonies of the English Empire and even behind the Indian Princely States that were under indirect colonial control. Moreover, what spending there was tended to go to secondary schooling at a high rate relative to international standards, with less than 40 percent of public education expenditures targeted to primary education. This suggests a misallocation of resources, because rates of return in developing countries are generally believed to be higher for primary education than for secondary education.4
Low and misguided spending were thus important factors that constrained the development of primary education. However, the aggregate patterns provide only a partial answer because they are unable to explain if and how local factors contributed to these patterns. Were the British solely responsible for the lack of progress or did local...