Revisiting the Kerala ‘Model’ of Development: A Sixty-year Assessment of Successes and Failures

Abstract

This article seeks to revisit the much-acclaimed Kerala ‘Model’ of Development since the formation of the state of Kerala. As such it subjects the development experience of Kerala for a period of six decades from 1960 to 2020. This exercise reveals that the development experience of Kerala is largely shaped by its historical past which privileged social development over purely economic development based on the growth of the goods producing sectors. State response to social and human development demands were more successful than the conventional efforts to enhance capital formation thereby transforming the material basis of the economy. The high human and social development led to large scale migration of persons, mostly men, to the Gulf countries that resulted in a kind of economic growth induced by outside money in the form of remittances. The national economic context was also one that led to a higher growth of the service sector than the material producing sectors. The limited opportunities afforded by the national state or the increased flow of outside money could not be seized effectively by the regional state to transform goods producing sectors such as agriculture and industry. This resulted in such major and spectacular failures as declining tax collection efficiency, increased net loss of state-owned public enterprises and massive waste of resources in implementing capital projects. I end the article with a call for a study of political economy of development by taking into account the specificities of the Kerala context within a larger national and international context. JEL Codes: O15, R11, F24, J6, H21, H41, H75