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Debating Decentralized Development: A Reconsideration of the Wenzhou and Kerala Models
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Debating Decentralized Development:
A Reconsideration of the Wenzhou and Kerala Models
*
DRAFT: Please do not cite without permission of author.
Last revised on August 17, 2004
ABSTRACT Given the rise of fiscal decentralization, it is worth examining the developmental experiences of two localities in China and India—Wenzhou and Kerala, respectively—which are considered developmental successes, albeit for different reasons. Wenzhou is best known within China as a locality that developed a vibrant private sector in the early reform era, i.e., 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 suggested that their experiences represent “models” that are worthy of emulation/replication. This paper 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 and/or financially sustainable. Third, local developmental strategies that yield productive results initially may ultimately undermine themselves over time. Kellee S. Tsai Department of Political Science 3400 North Charles Street Johns Hopkins University Baltimore, MD 21218 Voice: (410) 516-7972 Fax: (410) 516-5515
## email not listed ##
*Paper prepared for the 100
th
Annual Meeting of the American Political Science Association,
Chicago, September 2-5, 2004. The research for this paper was supported in part by a Ford Foundation Public Policy Grant.
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Debating Decentralized Development:
A Reconsideration of the Wenzhou and Kerala Models
*
DRAFT: Please do not cite without permission of author.
Last revised on August 17, 2004
ABSTRACT
Given the rise of fiscal decentralization, it is worth examining the developmental experiences of
two localities in China and India—Wenzhou and Kerala, respectively—which are considered
developmental successes, albeit for different reasons. Wenzhou is best known within China as a
locality that developed a vibrant private sector in the early reform era, i.e., 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 suggested that their
experiences represent “models” that are worthy of emulation/replication. This paper 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 and/or financially
sustainable. Third, local developmental strategies that yield productive results initially may
ultimately undermine themselves over time.
Kellee S. Tsai
Department of Political Science
3400 North Charles Street
Johns Hopkins University
Baltimore, MD 21218
Voice: (410) 516-7972
Fax: (410) 516-5515
## email not listed ##
*Paper prepared for the 100
th
Annual Meeting of the American Political Science Association,
Chicago, September 2-5, 2004. The research for this paper was supported in part by a Ford
Foundation Public Policy Grant.
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