ABSTRACT
Classical concern with economic growth and development was rekindled towards the end of the Second World War, as reconstruction and decolonization became part of an international agenda. Thinking about development and underdevelopment, some economists pursued a suggestive line of enquiry to argue that countries develop through processes that reinforce themselves over time. Thus, Rosenstein-Rodan (1943) argued in favour of a “big push”, consisting of several complementary investment projects needed to set in motion such a self-reinforcing process. Myrdal found that disparities between ethnic groups (1944) and countries (1957) tend to widen due to the operation of a similar “principle of circular and cumulative causation”. Kaldor explained regional and international imbalances through the self-reinforcing process of increasing returns (1989a, 1989c), and argued that standard “equilibrium economics” is incompatible with this framework of analysis (1989b, 1989d).
