Academic journal article Indian Journal of Economics and Business

Debating Decentralized Development: A Reconsideration of the Wenzhou and Kerala Models

Academic journal article Indian Journal of Economics and Business

Debating Decentralized Development: A Reconsideration of the Wenzhou and Kerala Models

Article excerpt

The Wenzhou model represents a successful case of indigenously generated petty capitalism, while the Kerala model represents a developmental success in terms of education, health care. and grassroots participation. Given the remarkable achievements of these localities, observers have suggested that their experiences are worthy of emulation and replication. This assumption has three limitations. First, although both models sound inspiring, their success depends upon particular conditions that are unlikely to be found in other localities. Second, neither "model" has proven to be fiscally or politically sustainable. Third, local developmental strategies that yield productive results initially may ultimately undermine themselves.

Model, n. A person or thing eminently worthy of imitation; a perfect exemplar of some excellence. Also: a representative specimen of some quality.

--10th definition, Oxford English Dictionary (2004)

I. INTRODUCTION

In both the study and practice of development, a sharp dichotomy exists between cases of developmental failure versus success. Given that the latter are scarce relative to the scores of developmental disappointments, if not disasters, when a positive example is discovered, it tends to acquire a near-canonical status in the field. Among practitioners of international development, certain types of activities and policy interventions become known as "best practices," which are then recommended and reproduced around the world by aid agencies and other donors. In academia, the components of a developmental success story become known as a "model," which then attracts the attention of scholars who seek to identify the causal mechanisms underlying its success, and explain why other patterns of development have not performed as well. While state-centric theories of the 1980s lead to a focus on various national-level developmental models, the rise of fiscal decentralization (and fiscal federalism) since then has called attention to the political economy of sub-national development.

It is within this context that the developmental experiences of two localities in China and India--Wenzhou and Kerala, respectively--warrant consideration by comparativists. Wenzhou is best known within China as a locality that developed a vibrant private sector in the early reform era, that is, before private enterprise was formally sanctioned by Beijing. Meanwhile, Kerala is known internationally as a locality that has a relatively low per capita GDP, but performs impressively well on human development indicators. In short, the Wenzhou model represents a successful case of indigenously generated petty capitalism, while the Kerala model represents a developmental success story in terms of literacy levels, quality of health care, and grassroots participation. Given the remarkable achievements of these localities, observers have called their experiences "models," thereby suggesting that they are worthy of study and emulation. (2) This article critically analyzes the assumptions underlying popular conceptions of these models and makes three arguments. First, although both models sound inspiring, their success is contingent upon a particular mix of conditions that is unlikely to be found in other contexts, even within the same country. Second, over time neither "model" has proven to be fiscally or politically sustainable. Third, local developmental strategies that yield productive results initially may ultimately undermine themselves over time.

The article proceeds as follows. The first two sections outline the key positive features of the Wenzhou and Kerala models, respectively, as they are typically portrayed in the media and scholarly literature and review the main explanations for their success. The third section presents the debates generated by the models with a focus on some of their limitations. The final part of the article reflects upon the theoretical and empirical implications of either idealizing or demonizing developmental models that are contextually and politically contingent. …

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