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Prof. Dean Yang

University of Michigan, United States

Authors: Dean Yang and Aneesha Parvathaneni

Abstract: Can temporary wartime mobilization change the long-run development trajectory of an economy? We study how mobilization for World War II in colonial India influenced its subsequent long-run economic development. From 1939 to 1945, the British colonial government purchased massive amounts of war materiel within India. We study long-run impacts on Indian structural transformation – the transition of employment from agriculture to the modern sectors (industry and services) – in Indian districts. Causal identification takes a shift-share approach, exploiting variation across industries in war-related government orders, and variation across districts in their pre-war industrial structure. We find that World War II economic mobilization (procurement of war materiel) had a positive and significant impact on long-run structural transformation in Indian districts. More than six decades later, Indian districts that experienced higher procurement of World War II materiel experienced higher structural transformation from agriculture towards industry and services. We find substantial spillovers on services sectors that were not directly subject to World-War-II-related procurement. The majority of structural transformation
effects are driven by procurement of heavy industrial goods.

JEL Classification: H56, N15, N45, O14, O25
Keywords: industrial policy, growth, structural transformation, war mobilization, India

Full Text: War Mobilization and Economic Development: World War II and Structural Transformation in India

Optional subject for students of Charles University - The lectures are conducted Czech language


In the lecture series "Fundamental Social Issues from the point of view of Economics" Filip Matějka and Jan Zápal, professors at CERGE-EI, address current global problems and demonstrate how economics views these issues.

The course is intended for students of all disciplines and academic years who wish to seek answers to questions (or understand why it is difficult to answer) such as: What can governments do, and what can markets do? What about social inequality, the future of work, global warming, threats to democracy, media, and (dis)information? The aim of this course is to familiarize students with the fundamental concepts and ways of thinking of modern economics using real-world social problems.

A total of 6 lessons will take place every Monday from 5:30 PM to 8:30 PM at the Faculty of Arts, nám. Jana Palacha 1/2, Prague 1, in room 300.

Nov 04, 2024: Markets, their functions and regulation. Welfare. Government interventions.
Nov 11, 2024: Global warming. Possible solutions and their issues.
Nov 18, 2024: The future of work and automation. The functioning of the labor market. The impact of education.
Nov 25, 2024: Social, economic, and gender inequality. Its origins and tools for mitigation.
Dec 02, 2024: The functioning of political markets. Current threats to democracy.
Dec 09, 2024: The functioning of media and information markets.

Course code in SIS: JCM039

You can find the course page with current information here.