Resisting Modernisation Due to Foreign Occupation: The Role of Religious Identity

Religious groups sometimes resist modern welfare-enhancing interventions, adversely affecting the group's human capital levels. In this context, we study whether the two largest religious groups in India (Hindus and Muslims) resisted western education because they shared religious identity with the rulers deposed by the British colonisers. We find that Muslim literacy in an Indian district under the British is lower where the deposed ruler was a Muslim, while Hindu literacy is lower where the deposed ruler was a Hindu. To deal with possible omitted variable bias, we instrument the religion of the deposed ruler with distance from the birthplace of Shivaji, a Hindu king who rebelled against the Muslim empire. We find other results consistent with the hypothesis espoused by some historians that when foreign occupiers dislodged Islamic rulers, Muslims showed resistance to the inventions/institutions introduced by the occupiers. Our paper is the first to document a similar effect among Hindus in India empirically.