Question

Explain the main indivisibilities. Describe the problem of balance among different sectors.​

Answer 1

A major development debate from the 1940s to the 1960s concerned balanced growth versus unbalanced growth. Some of the debate was semantic, as the meaning of balance can vary from the abrupt requirement that all sectors grow simultaneously and at the same rate to the more simple plea that same attention be given to all major sectors—industry, agriculture and services.

In contrast, A. O. Hirschman develops the idea of unbalanced investment to complement existing imbalances. A broad choice of development strategy is between Ragnar Nurkse’s theory of balanced growth (BG) and A. O. Hirschman’s theory of unbalanced growth (UG). The doctrine of BG is based on the economic rationale for a ‘big push’.

By contrast, UG is based on the hypothesis that a ‘big push’ or a ‘critical minimum effort’ is not feasible. So the best way to stimulate development in LDCs is to deliberately create an imbalance. The issue is yet to be resolved. So, there are two opposite issues on development strategy.

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