The Kerala Paradox

Abstract

Kerala, a small south Indian state, is described as a model for state led growth and as a state that challenges the link between high income and high social indicators. Kerala reportedly has high social development indicators and low incomes. This is suggested as a paradox and also as proof that greater state involvement can lead to higher social indicators. A closer look, however, reveals that Kerala income is understated and the growth rates in human indicators are not as high as is claimed. This paper argues that the Kerala paradox is neither a paradox nor a model for state led growth.

Keywords: Kerala, India, Development

JEL Classification: H70, O4, R11