Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
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.