Communist ideals to capitalist realities: uncovering Kerala model's struggle with foreign aid(ed) dependency and disempowerment of the marginalized

Abstract

This article analyses Kerala’s development model through dependency theory, highlighting its reliance on foreign aid and consequent policy constraints. It examines how tied loans eroded Kerala’s policy autonomy and social model, disproportionately affecting marginalized groups. The state’s financial crisis and strained central relations led to accepting loans with neoliberal conditionalities, undermining welfare policies. Using the World Bank-funded Jalanidhi project as a case study, it contextualizes Kerala’s aid dependence within global capitalism, where aid often acts as “euphemized domination.” It reveals the model’s vulnerabilities, interlinked with exploitative global relations, and advocates for economic restructuring fostering self-reliance and people-centered development.