Strategy of unbalanced growth

The strategy of unbalanced growth is a development strategy dar. According to this strategy, developing countries should their scarce financial resources on the promotion of key industries. Their positive development would radiate on suppliers and the rest of the economy.

Background

Albert O. Hirschman, a well-known proponent of the strategy, claims that the strategy of unbalanced growth, therefore, is the better alternative for the development of capital- poor developing countries. Instead of building an entire industrial complex, which is required to drive economic growth and induce then, Hirschman sees this induction mechanism in an economic imbalance. This idea is based on the Schumpeterian hypothesis " according to which any economic progress is caused by imbalances ". When trying to compensate for the inequalities that arise further imbalances etc.

Methodology

In contrast to the theory of " balanced growth " is not the expansion of industrial enterprises on various goods the basis for the induction process, but the emergence of suppliers and downstream operations of a particular product. For example, are much more in the production of automobiles, tires, car radios. needed. Suppliers would settle according to Hirschman, in the vicinity of these growth industries and promote an economic boom. The other way, with the settlement of a sawmill with the development of downstream industries, such as a furniture factory factory to be expected.

Interpretation alternatives

Other ways to interpret this theory relate to the "unbalanced growth " in the United spaciousness of a country and the relationship between center and periphery. In this interpretation, the strategy is often referred to as polarization strategy or growth strategy, individual growth centers, such as coastal cities, free trade areas or major cities are encouraged. The development in these centers will spread through a Sickereffekt to other parts of the country and thus trigger the " Big Push ".

Criticism

The main criticism of this interpretation is the increase in spatial disparities within a country. In addition, the permanent reinvestment of profits is required to obtain the Schumpeterian hypothesis. This economic rationality is the entrepreneurs in developing countries by making critics not have expected.