Welfare economics: Public policy gave Kerala the leading edge

Enlightened public policy helped put Kerala way ahead of other States in the race to achieve the overall well-being of its people.

It would be instructive to compare the State’s performance with that of Gujarat under Narendra Modi.

Whatever may have been the success of Gujarat, the fact remains that Kerala’s early start has meant that a whole generation here had experienced relative well-being before the people of Gujarat did.

This is how Pulapre Balakrishnan, leading economist and faculty of Centre for Development Studies here, put it while delivering the 21{+s}{+t} Achutha Menon lecture in memory of Kerala’s former Chief Minister.

Also, Kerala had achieved its outcomes when it had lower levels of income, the technology of replication was far less developed, and there were few role models in the developing world, making its policy stance even more remarkable.

Despite Gujarat’s rapid progress, which is entirely to be welcomed for the benefits that it brings the Gujarati people, Kerala has lower poverty measured in terms of consumption and of course better social indicators.

Low per capital income can no longer be an excuse for low human development, Balakrishnan said citing Kerala’s fabled developmental experience.

This is the major lesson that Kerala’s history holds to the less developed regions of the rest of the country.

Public policy is the key here, Balakrishnan notes, and their governments must be made to move with alacrity on the provision of basic health and education to the mass of the population.

In this context, Balakrishnan recalled an observation by fellow economist Arvind Panagariya on Kerala’s development experience.

Panagariya had stated that the state’s progress is not unique as many other states have actually shown greater social progress.

This, according to Balakrishnan, is a statistical outcome related to the fact that Kerala was already ahead of others at the start, making it likely that its recorded progress would be lower than theirs.

He then went on to quote from the study by Panagariya and another leading economist Jagdish Bhagwati of the relative progress made by Gujarat starting from the same level of health and education.

“They now find that Gujarat’s rate of progress has been faster, albeit only slightly, than that of Kerala. This is methodologically a more sound exercise of course, but it is not clear what it tells us,” Balakrishnan said.