Poverty traps as major causes of underdevelopment
{"Image DocumentName": "Poverty traps as major causes of underdevelopment", "Image ImageDescription": "WWII theorists : G Myrdal, A Hirschman, P Rosenstein-Rodan (1943): why some economies are unable to trigger the virtuous process of catching-up? => concepts of spillover effects, linkages and complementarities: overlap with those of cumulative causation and path dependency. Rosenstein-Rodan: spillovers = increasing returns to an activity proportional to the number of others who undertake the same activity. Absence of spillovers, coordination failures => multiple equilibria and underdevelopment traps: low equilibria, coordination failures and poverty traps are endogenous and self-reinforcing. => markets alone cannot achieve the coordination necessary for triggering development (Adelman, 2000; 2001). Markets do not necessarily lead from the lowest equilibrium to the best one (Hoff, 2000). => hence role of the state at the early stages of development = the entity most able to reallocate factors and resources across markets=> \u2018big push\u2019 (Murphy et al., 1989). State capacity is endogenous to the level of development (Bardhan and Udry, 1999) => underdevelopment traps are likely at early stages of development, their determinants being economic, political, institutional.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}