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The Strategy of Economic Development
The Strategy of Economic Development
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The Strategy of Economic Development

by Albert O. Hirschman. 251 pgs.

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publication details

Contributors:

   Albert O. Hirschman

Publisher:

   Yale University Press

Place of Publication:

  New Haven, CT  

Publication Year:

  1958
Subjects:   Economic Development
Table of contents
Preface to the 1958 Edition v
Preface to the 1961 Edition vii
1. Preliminary Explorations 1
The Search for the Primurn Mobile 1
The Importance of Being a Latecomer 7
The Idea of Change as an Obstacle to Change 11
The group-focused image of change. The ego-focused image of change. Exaggerated expectations and personalized liquidity preference.
The Need for Inssducement Mechanisms 24
2. Growth Models and Development Processes 29
The Economics of Growth-Help or Hindrance? 29
Explaining Investment Activity 33
The Ability to Invest 35
The Complementarity Effect of Investment 40
The Forces Corroding Development 44
3. Balanced Growth: A Critique 50
Is Balance in Demand Required? 50
The Paradox of the Internalization Doctrine 55
Different Types of Internalization and Their Effect on Growth 57
4. Unbalanced Growth: An Espousal 62
Is Balance in Supply Required? 62
Development as a Chain of Disequilibria 65
A Definition of Induced Investment 70
Some Related Points of View 73
5. Investment Choices and Strategies 76
Efficient Sequences versus Investment Criteria 76
Social Overhead Capital (SOC) versus Directly Productive Activities (DPA) 83
Definitions and biases. Development via shortage and via excess capacity of SOC. Suitability of the various sequences. Limits to development via SOC shortage.
6. Interdependence and Industrialization 98
Backward and Forward Linkage Defined 98
A Mental Experiment 104
Backward Linkage at Work 109
A Model of Capital Formation Based on Backward Linkage 113
Combining Backward and Forward Linkage 116
7. Industrialization: Further Characteristic Aspects 120
The Role of Imports in Inducing Industrial Development 120
The Reason for Dualistic Development 125
8. Efficiency and Growth of the Individual Firm 133
The Need for Built-In Spurs 133
The Maintenance Problem and a Suggested Solution 139
Generalizing the Solution 143
Capital-Intensive Technology? 150
Production versus Administration Tasks 153
9. The Role of Disturbances 156
Inflation 156
Types of upward pressure on prices. The price-price spiral. Balanced growth and inflation.
Balance-of-Payments Pressures 166
Supply imbalances and the demand for imports. The foreign exchange illusion. "Exportability" of fast-growing outputs as a condition of external balance. Growth-inducing effects of fluctuations in foreign exchange earnings.
Population Pressures 176
10. Interregional and International Transmission of Economic Growth 183
"Growing, Points' and Lagging Regions 183
Trickling-Down and Polarization Effects 187
The Regional Distribution of Public Investment 190
Interregional and International Transmission Compared 195
The case for separatism. The case for surrender of sovereignty.
Optimal Institutional Arrangements 199
11. Conclusion: Functions of Government and Foreign Aid 202
The Two Functions of Government 202
The Role of Foreign Capital and Aid 205
The Argument in Perspective 208
Postscript 211
Author Index 245
Subject Index 248
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