Thursday, September 27, 2007

A very unstable State

One of the research projects I started working on this summer was a study of the nature of Kerala and its economy. What got me started was an article in EPW about how peacefully Communism has lead to the economic success of Kerala. I entirely disagreed with the author. Woven within his praise for the communist government were a lot of examples as to how pro market policies were helping the state, and how anti-market policies were having unintended consequences. A typical ECON 101 story. Since then I have been working on a serious paper and doing a lot of background research on Kerala. Turns out, the State has a very unstable past. For the first 10 years of independence it was under President's rule. In 1957, the first State Government, was formed. However, this and subsequent governments have been pretty unstable until the eighties. Maybe there's a reason here to the State's success. The politicians were too busy fighting for power that they let the economy be relatively free. Nice theory, can't say it will stand up empirically, but I am excited about it.

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