Income distribution in rural Bangladesh: The effect of village organization with associated improved technology

In this study, an attempt is made to analyse the effect of village organization and associated improved farm technology on income distribution in rural Bangladesh. The study uses empirical data collected through an intensive survey of rural families from eight villages of Mymensingh district. Three important village organizations, namely the Integrated Rural Development Programme, the Shimla and the Swanirvor were covered, taking two villages from each type. Also, two traditional villages were covered to facilitate comparisons. The design of the sample was a stratified random sample with proportional allocation. The samples provided one year's data for the year 1980-81 on households' incomes. Data were analysed using simple statistical techniques. The main purpose of the study was to critically examine the hypothesis that the institutional approach represents a 'third way of development' and that growth and equity can be simultaneously promoted in rural Bangladesh through the techno-economic programmes like IRDP, Swanirvor and Shimla. Analysis of cross-section data, however, points to the contrary. The results show that the average level of household income is likely to improve in absolute terms, but the distribution of income is likely to worsen in the organized villages compared with traditional villages. The greater share of benefits of the village organizations with associated improved technologies seems to have accrued mainly to relatively larger landowners whereas very small farms and landless rural households were only limited beneficiaries. Over time, the process of land alienation has been more accentuated in the organized villages than the traditional ones. With regards to productivity, there is a tendency towards diseconomies of scale in both the organized and the traditional villages. The results of the study suggest that the neglect of existing inequality of land ownership and power may lead to a failure of the village organizations with associated improved technologies in the fulfilment of twin objectives - growth and equity - in rural Bangladesh. If any programme for increasing income and reducing inequality is to be successfully implemented, land ownership patterns along with other related issues have to be taken into account. Implications of the findings for framing rural development policy and for conducting further research are discussed.