The Strategy of Economic Development

The Strategy of Economic Development is a 1958 book on economic development by Albert O. Hirschman. Hirschman critiques the theories of balanced growth put forward by Ragnar Nurkse and Paul Rosenstein-Rodan, which call for simultaneous, large-scale increases in investment across multiple sectors to spur economic growth. ^{[1] [2]} Hirschman argues that such strategies are unrealistic and often infeasible in underdeveloped countries. In place of balanced growth, Hirschman proposes a theory of unbalanced growth , where "imbalances" and "pressure points" created by the growth process can be used to identify areas where policymakers can intervene. In addition, Hirschman introduces the notions of backward linkages---the demand created by a new industry for intermediate goods---and forward ones---the knock-on effects on industries who use the present industry's goods as inputs. ^[3]

Along with Arthur Lewis's Theory of Economic Growth, and Walt Rostow's Stages of Economic Growth , the Strategy is often considered one of the seminal works of development economics. ^{[3] [4]}

References

1. Hirschman, Albert Otto. (1958). The strategy of economic development. New Haven, Conn: Yale Univ. Press. ISBN   0-300-00117-7. OCLC   265036663.
2. Adelman, Jeremy. (2013). Worldly philosopher : the odyssey of Albert O. Hirschman. Princeton, NJ. ISBN   978-0-691-15567-8. OCLC   820123478.
3. Krugman, Paul. "The Fall and Rise of Development Economics".
4. Rodrik, Dani (2005). "Growth Strategies" (PDF). Handbook of Economic Growth. doi:10.1016/S1574-0684(05)01014-2.