Paul Rosenstein-Rodan Research Articles

Economic Responses to Nazi Aggression in Europe: Albert Hirschman and Paul Rosenstein-Rodan on the Economic Sovereignty of Central and Eastern Europe

Abstract Germany's expansion in Central and Eastern Europe was not just one among many aggressive moves by the Third Reich but the central strategy of the Nazi imperial project on the continent. Prominent economists, politicians, and think tanks agreed that crucial to this project was Germany's economic domination of the area, and they committed to developing a new vision for a postwar international order that avoided the instability and turmoil of the interwar years. This article discusses the analyses of the crisis of Central and Eastern Europe and solutions to it that Albert Hirschman and Paul Rosenstein-Rodan, then both virtually unknown and working independently one from the other, produced during World War II—Hirschman with a focus on the international dimension and Rosenstein-Rodan with a focus on the domestic one. This article offers a synthetic discussion of how the war deeply affected their economic thinking and how, in turn, their analyses became foundational elements of new and important disciplinary fields in the postwar decades, such as international political economy and development economics.

External Loans and Poverty Challenge in Nigeria, 2010-2020: Towards Deconstruction of an Antithesis

This study investigated the correlations between external loans and poverty elimination efforts in Nigeria from 201o to 2020. Owing to several reasons which include inadequacies of her domestic savings and foreign exchange, Nigeria’s macroeconomic space has over time witnessed perennial external borrowings which, for instance, rose from US$4,534.19 billion as at 30th September, 2010 to US$33,348.08 billion as at December 31, 2020 or N12,705,618.48 trillion. The key concern, however, is how the country has leveraged on those borrowings in order to reduce her soaring poverty rates put at over 83 million citizens living below poverty line of $1.90 per day. Consequently, the primary objective of this study was to investigate how impactful the external loans had become on the poverty-alleviation efforts of the developing economy. To achieve the objective, the following hypothesis was posed: how has Nigeria’s external borrowings supported poverty alleviation efforts in the country? Anchored on the Big Push Theory propounded by Paul Rosenstein-Rodan in 1943, the study adopted ex-post facto research design and documentary method for data collection. Qualitative descriptive method was used for data analysis. Among other things, the study found out that Nigeria’s external borrowings have not offered support for poverty alleviation with its characteristic low disbursements. It equally found out that the loans were not invested in productive sectors for beneficial effects on poverty alleviation. In view of the findings, the study recommended that there is need for poverty alleviation to be made the primary focus of Nigeria’s future external borrowings. It also recommended the need for external loans to be massively invested into projects with high capital returns which will produce desired effect on poverty reduction.

Paul Rosenstein-Rodan and the Birth of Development Economics

This article, based on previously untapped archival sources, offers an assessment of the life and thought of Paul Rosenstein-Rodan, a pioneer of development economics and one of the first articulators of both the “Big Push” and “balanced growth” theories. In addition to documenting the early life of Rosenstein-Rodan, this article discusses two critical junctures in the history of development economics, namely, the birth of the discipline in the late 1940s and its decline approximately a quarter century later. Rosenstein-Rodan was a fundamental player in both instances. Through the lens of his experience it is possible to understand the eclectic beginnings of development economics and locate some of its most important roots in the intellectual milieu of interwar Europe, from Vienna to London via Eastern and Southern Europe. What is more, Rosenstein-Rodan’s subsequent career epitomizes the arc of development economics, casting new light on the debates and practices that shaped the discipline during its rise and on the unresolved issues that help explain its decline.

Paul Rosenstein-Rodan and the Birth of Development Economics

This paper, based on previously untapped archival sources, offers an assessment of the life and thought of Paul Rosenstein-Rodan, a pioneer of development economics and one of the first articulators of both the “Big Push” and “balanced growth” theories. In addition to documenting the early life of Rosenstein-Rodan, this paper discusses two critical junctures in the history of development economics, namely, the birth of the discipline in the late 1940s, and its decline approximately a quarter century later. Rosenstein-Rodan was a fundamental player in both instances. Through the lens of his experiences it is possible to understand the eclectic beginnings of development economics and locate some of its most important roots in the intellectual milieu of inter-war Europe, from Vienna to London via Eastern and Southern Europe. What’s more, Rosenstein-Rodan’s subsequent career epitomizes the arc of development economics, casting new light on the debates and practices that shaped the discipline during its rise, and on the unresolved issues that help explain its decline.

The culture of investment-led international development: the Chatham House circle (1939-45) and lessons for today

In 1939-45 an economic group for the discussion of postwar economic order was established at Chatham House, gathering a transnational community of economists and scholars at 10 St James Square in London. Papers were written and seminars were held before-and following-the conference held in Bretton Woods in 1944. Polish-born economist Paul Rosenstein-Rodan (1902-1985) coordinated the group, which invoked investment-led growth and new international institutions for development. Chatham House played a role in making sense of, and disseminating, this new culture of international development. To be clear, this 'new' culture was not entirely new, and had its roots in the interwar years, including colonial development policy. Nor was Chatham House the only hub of this culture. This article aims at filling a gap in our understanding of the role of economic research done at Chatham House during the Second World War. In addition, by looking to the past, it may also help at broadening our views on how to globally reignite growth today. Policy-makers seem to have learnt some of the monetary lessons of the 1930s, but not the development ones of the 1940s. This article is based on sources from the Chatham House archive and brings to special attention articles published in International Affairs. [ABSTRACT FROM AUTHOR]

Armadilha de lucratividade e Big Push: considerações a partir de Rosenstein-Rodan

Resumo Este ensaio apresenta uma situação de armadilha de lucratividade como mecanismo teórico explicativo da condição de estagnação de determinadas economias, sobretudo aquelas em desenvolvimento. Utilizando algumas contribuições teóricas de Paul Rosenstein-Rodan, defende-se, como possibilidade de ruptura desta condição, a ocorrência de um Big Push para que uma escala mínima de capital seja gerada e retornos crescentes sobre o trabalho, advindos de ganhos de aprendizagempossam atuar. O principal resultado é que esses ganhos são fundamentais para se gerar um círculo virtuoso, que intensificará o processo de industrialização e guiará a economia em direção a elevados níveis de renda.

Poverty Traps: A Perspective from Development Economics

The concepts of coordination and cooperation are widely used in economics, and particularly in game theory. They were also at the foundation of development economics at the time of WWII, with Paul Rosenstein-Rodan highlighting the existence of intersectoral spillovers effects, multiple equilibria and underdevelopment traps. These concepts returned to the forefront of development theory in the 1970s with the notions of coordination failure and poverty traps, as well as the research on social norms. One example was Samuel Bowles' seminal concept of 'institutional poverty traps', i.e. highly inegalitarian institutions that persist even though they are inefficient. Membership institutions are of particular relevance in developing countries, and therefore in development economics. The paper explores the cognitive dimensions of coordination failures and institutional traps; it reveals that local institutions in developing countries may be efficient and examines the conditions in which norms create poverty traps, in particular membership norms. Firstly, it is argued that institutions and norms are key causes of the formation and persistence of poverty traps. Institutions and norms are complex cognitive devices, some beliefs and norms appear to be particularly resilient and difficult to revise. Secondly, it is shown that no particular institutional form is ex ante a cause of poverty traps: depending on contexts, the same institutional forms can be efficient or inefficient. It is the combination of multiple elements - economic and political environment, and social norms - that create thresholds effects and entrap groups into low equilibria. Thirdly, it is argued that the norms that organise group membership, because they involve beliefs that are difficult to revise, are typical factors of poverty traps.

Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth

Paul Rosenstein-Rodan argues that economic development requires coordinated investment in many interdependent industries, and prescribes a flood of state-controlled investment across all sectors—a so-called big push. Widespread government failure defeated twentieth-century ‘big push’ schemes. But spillovers across firms and industries, and from public goods, hold-up problems, and capital market limitations are real, and justify coordinated growth across sectors if it can be done without government failures. Large, extensively diversified pyramidal business groups of listed firms dominate the histories of developed economies and the economies of developing economies. Arguing that such groups provided this coordination in prewar Japan after a state-run big push failed, we propose that pyramidal business groups are private-sector mechanisms for coordinating big push growth, and that competition between rival groups induces efficiency unattainable in a state-run big push. We postulate that a successful business-group led big push requires economic openness, basic public goods, rule of law, separation of the state from business, and a timely demise of business groups when the big push phase is complete.Where these criteria are not met, growth stalls and oligarchic families become too powerful to dislodge.

Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth

Paul Rosenstein-Rodan argues that economic development requires coordinated investment in many interdependent industries, and prescribes a flood of state-controlled investment across all sectors—a so-called big push. Widespread government failure defeated twentieth-century ‘big push’ schemes. But spillovers across firms and industries, and from public goods, hold-up problems, and capital market limitations are real, and justify coordinated growth across sectors if it can be done without government failures. Large, extensively diversified pyramidal business groups of listed firms dominate the histories of developed economies and the economies of developing economies. Arguing that such groups provided this coordination in prewar Japan after a state-run big push failed, we propose that pyramidal business groups are private-sector mechanisms for coordinating big push growth, and that competition between rival groups induces efficiency unattainable in a state-run big push. We postulate that a successful business-group led big push requires economic openness, basic public goods, rule of law, separation of the state from business, and a timely demise of business groups when the big push phase is complete.Where these criteria are not met, growth stalls and oligarchic families become too powerful to dislodge.

Hunger and Containment: How India Became “Important” in US Cold War Strategy

Hunger and Containment: How India Became “Important” in US Cold War Strategy

“LOOKING AT THE OTHER SIDE OF THE COIN”: ALLYN YOUNG AND THE EARLY DEVELOPMENT THEORY

This paper investigates the influence of Allyn Abbott Young's theoretical work on the groundbreaking contributions of early development theorists, Paul Rosenstein-Rodan and Ragnar Nurkse. The work of Allyn Young had a significant impact on early development theory as the above-mentioned pioneers of development economics built substantial portions of their theories—the “big push” and “vicious circle and balanced growth,” respectively—on the dynamic external economies, an integral part of the vision of self-sustaining growth, as described in Young (1928).

“Looking at the Other Side of the Coin”: Allyn Young and the Early Development Theory

This paper investigates the influence of Allyn Abbott Young's theoretical work on the groundbreaking contributions of early development theorists, Paul Rosenstein-Rodan and Ragnar Nurkse. The work of Allyn Young had a significant impact on early development theory as the above-mentioned pioneers of development economics built substantial portions of their theories—the “big push” and “vicious circle and balanced growth,” respectively—on the dynamic external economies, an integral part of the vision of self-sustaining growth, as described in Young (1928).

Catch-up strategies and the latecomer effect in industrial development

Scholarly attention to the issue of world industrial development now spans at least 60 years – if we go back just to debates over the ‘Big Push’ of Paul Rosenstein-Rodan or to the strategy of const...

Book Review:Development and Planning: Essays in Honour of Paul Rosenstein-Rodan. Jagdish N. Bhagwati, Richard S. Eckaus

Book Review:Development and Planning: Essays in Honour of Paul Rosenstein-Rodan. Jagdish N. Bhagwati, Richard S. Eckaus

Development and Planning: Essays in Honour of Paul Rosenstein-Rodan.

Part I: Growth of Development Economics 1. Development Economic Before 1945 2. The World Bank's Concept of Development - An In-House Part II: Development and Planning 3. Should Growth Rates be Evaluated at International Prices 4. Economic Growth with Unlimited Foreign Exchange and No Technical Progress 5. Absorptive Capacity as a Constraint due to Maturation processes 6. A Model of Growth Capitalism in a Dual Agrarian Economy 7. Short-term Economic Policy Part III: Income Distribution and Regional Development 8. Income Distribution and Agricultural Development 9. Trade-off Curves and Regional Gaps 10. Tendencies and Determinants of Income Distribution in Western Countries - a Note 11. The Process of Industrialisation of an Overpopulated Agricultural Area - the Italian Experience Part IV: Development and International Trade 12. Restrictions on Direct Investment in Host Countries 13. Adjustment Under the Bretton Woods Code with Special Reference to the Less Developed Countries 14. International Capital Movements, Fixed Parities, and Monetary and Fiscal Policies Part V: Cost-Benefit Analysis 15. Further Reflections on the OECD Manual of Project Analysis in Developing Countries Part VI: Labour Productivity and Other Characteristics of Cement Plants - An International Comparison 17. Some Evidence on the Short-Run Productivity Puzzle VII: Value Theory 1*. A Quantum-Theory Model of Economics: Is the Co-ordinating Entrepreneur Just Worth His Profit?