Asian Development Bank, Policy Conditionalities and Social Democratic Governance: Kerala Model Under Pressure?

Abstract

This case study of the implications of the Asian Development Bank (ADB) loan on the Indian state of Kerala explores how neoliberal reforms have impacted on the state's much-acclaimed social model of development. Notwithstanding resistance, the state moves towards market-driven reforms wherein external funds are privileged over internal resources, the reasons for which are probed within the context of social structures of accumulation and emergent power relations. It is argued that with the diversion of resources towards debt servicing and compliance with policy conditionalities, the collaboration with the ADB is likely to undermine social democracy. What ensues is a double collapse: a collapse of the Kerala Model of social development and the demise of an iconized Left. This paper thus contributes, first, to the growing literature on the political-economic repercussions of Structural Adjustment Programs in developing regions and second, to the limited scholarship on the adoption of right-wing neoliberal policies by social democratic governments.