Kerala and the Indian Federal System: Restriction and Response
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Kerala and the Indian Federal System: Restriction and Response Dewey Bennett University of North Carolina Wilmington Faculty Mentor: Jennifer Horan University of North Carolina Wilmington ABSTRACT The Indian federal state of Kerala has long been noted by scholars for its seemingly contradic- tory pattern of development, commonly referred to as the “Kerala paradox.” The paradox re- fers to Kerala’s exceptionally high quality of life paired with poverty and economic stagnation across the past half-century. This paper posits that the paradox can be accurately explained via existing theories of parliamentary federalism and basic needs development without paradoxi- cal implications. Moreover, it suggests that India’s asymmetrical, parliamentary federal system has been toxic to the progress of development in Kerala, in spite of the great strides made by the Keralans. It will be argued that the emergence and significance of Kerala’s massive remittance economy is the primary response of the educated Keralans to India’s federal failures. ven though it is home to the world’s poverty and stagnant economic growth. The Esecond largest population, India’s lag- contradictory implications of these strange ging development is a reflection of its size, bedfellows have drawn the curiosity of de- resources, and development policies. Though velopment researchers. Traditionally, coun- macro-level economic indicators have dis- tries were not expected to behave in this man- played moderate gains since the implementa- ner, but Kerala is not a country. As a result, tion of neoliberal economic policies, quality the paradox of the Keralan developmental of life indicators have resisted progress at experience can be understood best within similar rates. India, however, is also home to the context of the powerful and centralized an outlier. The subnational state of Kerala near Indian federal system. This paper will argue the southern tip of the peninsula experiences that the Kerala paradox is a failure of the par- ‘Very High’ Human Development Index liamentary federalist approach of national or- scores, which puts it on par with many in- ganization in large, diverse states. dustrialized sovereign states, despite extreme Kerala is a constituent federal state, not a 114 Dewey Bennett sovereign nation, operating under a different Manifesto as traditional society, pre-take off, set of rules and restrictions than individual take off, drive to maturity, and finally an age countries. The additional constraints of the of high-mass consumption, signifying mo- federal system of India can explain both why dernity (Rostow 1960). This theory focused Kerala has excelled in certain areas, yet fal- on industrial-scale actors and came to under- tered in others, and why the central govern- lie the neoliberal economic theories which ment has struggled so greatly to replicate rose to prevalence in the 1980’s and 1990’s similar results in other states through expan- (Woodcock 1998). Rostow’s theory, in par- sions of its authority. Kerala’s successes and ticular, outlines entrepreneurship and the failures have been defined by the struggle be- importance of private investment in creating tween mutually-reinforcing, locally tailored the basis for a modern economy, seeing in- policies and the central government’s pow- creases in quality of life as a resultant benefit erful abilities to restrict the economic abili- of industrialization and consumerism. Due to ties of subnational governments, resulting in its concentration on macro-level indicators, a remittance economy based on the tempo- modernization theory was criticized by de- rary migration of labor. Beyond the federal pendency theorists who claimed it caused a conflict, Kerala owes much of its success to ‘race to the bottom’ which ultimately under- high levels of mass participation and early mines the goals of increased living standards. one-party hegemony, enhancing its ability The benefits of living in an industrialized so- to provide for citizens’ basic needs despite ciety are greatly jeopardized when the gov- relatively limited governmental powers at ernment is most concerned with decreasing the local level. Ultimately, central govern- labor regulations to curry the favor of foreign ment interference has stunted contemporary investors whose funds are critical according economic growth by its emphasis on equal to modernization theory. Despite its criti- development, India’s vast diversity, and pro- cism, however, dependency theory offered hibitive tax structures. no alternative blueprint to which developing nations could look. Literature Review By the 1970’s many scholars felt evidence I. Basic Needs Theory was insufficient to demonstrate wealth was Before World War II, there was little aca- ‘trickling down’ to individuals as top-down demic work by researchers on the develop- theories like Rostow’s predicted. During ment of third world nations (Harris 2000). this period, a body of work began to emerge With the rise of newly independent democ- around the doctrine of ‘basic needs’ as a pos- racies in the former colonies and increase in sible alternative method of development. globalization, increased interest in develop- The basic needs model focuses on meeting mental theory led researchers to explore their the developmental needs of individuals, as transitions to modernity. The overarching opposed to those of the national govern- normative goal of developmental theory is to ment and industries (Woodcock 1998). The increase the standard of living in underdevel- primary concerns of the basic needs model oped nations both socially and economically are the promotion of education and health- (Birdsall 1993). The early body of work in care (Streeten 1981). Gains in education are this area came to be known as modernization considered the most fundamental since they theory. This theory focuses on non-industri- are observed to increase standards of living alized countries following stages of devel- across the board, even if the educated popula- opment as did current first-world countries tion does not go on to work in industry. For through an emphasis on increased industrial example, the yields of farmers increase and output and macro-level indicators. The five infant mortality rates of domestic mothers stages were outlined in a landmark work, decrease with each additional year of educa- The Stages of Growth: A Non-Communist tion in developing countries (Birdsall 1993). 115 Explorations |Social Sciences The presence of education is therefore theo- concept of liberalism (Verney 1995). This rized to be mutually reinforcing with other sort of federalism was not simply an arrange- goals of development through the increase of ment of federal power but an integral part general efficiency. of a planned system of checks and balances. Though basic needs theory seeks to di- Internationally, the concept of federalism rectly raise the standards of living of the evolved greatly over the 19th and 20th cen- average citizen, it is not primarily a welfare turies as it became recognized as a means to concept (Streeten 1981). Basic needs theory balance the increasing needs of states more seeks to explain a means of achieving a sus- than as a philosophy of government. Referred tainable transition to an industrialized society to as post-modern federations, these are sys- without causing, and to buffer, the negative tems seen as a means of making government effects of economic restructuring. The theory more manageable in large states (Saxena presents a primary policy focus, but does not 2012). prescribe a specific economic system of de- States which utilize this form of federalism velopment like neo-liberal models. What is are fundamentally different from those made required, however, is a strong level of mod- of pre-existing territories seeking mutual ben- eration and coordination in developmental efits, like the United States and Switzerland. goals (Birdsall 1993). The most promising A branch of these artificial federal structures, results of the basic needs model result from such as India and Canada, are known as ‘par- advancements in primary education, with di- liamentary federations’ and suffer from their minishing returns in secondary and tertiary misalignment with standard federal theory levels (Psacharopoulos 1994, Ozturk 2001). (Verney 1995). This marriage of parliamen- The application of too much social policy tarian central governing principles coupled without relevant economic growth can result with limited regional governance was also in overeducation, ironically a problem pre- studied, as executive federalism, by Watts viously thought only to plague modernized (1989). The power structures of these two states (Mehta et al. 2010). Ultimately, basic states are focused on the Westminster system, needs theory promises both immediate stan- developed in a unitary state, which grants dis- dard of living increases and a means for sus- proportionate amounts of power to the lower tainable transition to industrialization. houses of parliament. When designed in the 1860’s, this fusion of systems was considered II. Federalism pragmatic; there was no attempt to justify the Federations are a form of political organi- system on a theoretic rationale (Watts 1989, zation characterized by the sharing of powers 2). Overall, this kind of system is noted for between distinct national and constituent gov- its considerably higher prevalence of inter- ernments (Elazar 1993). These governments governmental conflict (Watts 1989, 15). The are supposed to work