Free Why Growth Matters by Jagdish Bhagwati

dominant story of Kerala as a state-led success in the postindependence era simply does not stand up to a careful empirical investigation.
    When confronted with the evidence contained in our second observation above relating to the lackluster performance of Kerala in terms of the progress in the social indicators in the postindependence era, proponents of the Kerala model counter that this comparison is misleading because each percentage-point improvement gets harder as we reach higher and higher levels of achievement. For example, it is much harder to improve literacy from 50 percent to 60 percent than from 20 percent to 30 percent.
    But there are at least three reasons why this defense is implausible:
    Â Â Â Â Â Â Â  •    There is no compelling reason that the going should get rougher as the level of an indicator rises. True, the scope for improvement in literacy is less the closer the level of literacy to 100 percent, but this need not translate into slower progress on the margin. Indeed, one can think of many reasons that the going might get easier as the literacy rate rises: the social pressure on a family to impart literacy to its children will rise with the proportion of literate children in its neighborhood. As the level of literacy rises, the pressure on the government to do something about those left behind also rises. Besides, with low levels of literacy, teachers are not easy to find since the handful of the literate are much in demand in other occupations.
    Â Â Â Â Â Â Â  •    Again, if the Kerala model is that much more effective, it should be able to overcome a higher barrier and still deliver a superior outcome. In effect, resorting to the argument that the performance looks poorer because a higher starting point gives the state a handicap seems like an admission that the model is as mortal as any after all.
    Â Â Â Â Â Â Â  •    Finally, there is an objective way to test whether the higher starting point was truly a handicap or the Kerala model has indeed been overrated. We can accomplish this by assigning Kerala and the other states the same starting point and then evaluating who wins the race. In Figure 5.7 , we depict the progress in literacy in Kerala, Gujarat, Maharashtra, and India with their starting years being 1951, 1981, 1971, and 1981, respectively. These starting years assign the four entities as close a starting literacy rate as data would permit. 12 We depict the literacy rates at the end of three decades since this is as far as we can go for Gujarat and India, whose starting points are both 1981.
    Gujarat unambiguously beats Kerala: it starts more than 2 percentage points below Kerala in year 0 but ends up a hair’s breadth above it in year 30. Both Maharashtra and India as a whole perform only slightly worse than Kerala. For example, Maharashtra is 1.4 percentage points below Kerala in year 0 and 2 percentage points below it in year 30. India as a whole performs similarly.
    The discussion up to this point has focused on the developments in health and education in Kerala in the postindependence era. An interesting and important unanswered question, however, is what accounts for Kerala’s having acquired its gigantic lead over much of the rest of India at independence. Even here the conventional story that this was to be attributed to the movements for social justice and social programs by the rulers of Travancore and Cochin is quite incomplete. Careful scrutiny gives way to a more complex explanation that includes important links of Kerala’s early success to globalization.
    While we have been unable to find reliable accounts of developments in the health sector in pre-independence Kerala, Robin Jeffrey (1992), who has spent many years living in various parts of India since the 1960s, offers a detailed account of the socio-economic-political developments that contributed to the spread of literacy in Kerala in