Unbalanced Growth Strategy

The imbalanced growth strategy is a development strategy. According to this strategy, developing countries should concentrate their scarce financial resources on promoting key industries. Their positive development would then have an impact on suppliers and the rest of the economy.

background

Albert O. Hirschman , a well-known proponent of the strategy, claims that the imbalanced growth strategy is therefore a better alternative for development in financially deprived developing countries. Instead of building an entire industrial complex that is supposed to drive and then induce economic growth, Hirschman sees this induction mechanism as an economic imbalance. This idea is based on Schumpeter's thesis, "according to which all economic progress is triggered by imbalances". Trying to even out the inequalities creates further imbalances, etc.

methodology

In contrast to the theory of " equilibrium growth ", the basis for the induction process is not the expansion of industrial operations to include various goods, but rather the emergence of suppliers and processing companies for a specific product. For example, in the production of cars, tires, car radios and much more. needed. According to Hirschman, supplier companies would settle in the vicinity of these growth industries and drive an economic upswing. Conversely, when a sawmill is established, further processing industries, such as a furniture factory, can be expected.

Interpretation alternatives

Other possibilities for interpreting this theory relate to “unbalanced growth” on the spaciousness of a country and the connection between the center and the periphery. In this interpretation, the strategy is often referred to as a polarization strategy or a growth strategy, and individual growth centers such as coastal cities, free trade zones or capital cities are promoted. The development in these centers should spread to other parts of the country through a seepage effect 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 constant reinvestment of profits is necessary to maintain Schumpeter's thesis . Some critics do not credit entrepreneurs in developing countries with this economic rationality.

literature

• Klaus Grimm: Theories of underdevelopment and development strategies. An introduction . Opladen 1979.
• U. Kümmerle and N. von der Ruhrer: Fundamente course topics. Development spaces in the tropics . Saulgau / Aachen 2001.