regional development

1. Theories of Unbalanced (Polarized) Development

Theories of unbalanced or polarized development posit that economic growth is naturally uneven. Instead of spreading uniformly across a territory, growth tends to concentrate in specific sectors or geographic points, creating centers of intense activity.

1.1 Hirschman's Strategy of Unbalanced Growth

Albert O. Hirschman argued that the primary bottleneck in developing nations is the lack of decision-making ability and entrepreneurial spirit, not just a lack of resources. He proposed that investment should be concentrated in industries with high "linkage effects" to stimulate further investment.

Backward Linkages: The demand an industry creates for inputs from other sectors.
Forward Linkages: The supply an industry provides which becomes inputs for other sectors.
Disequilibrium: By creating deliberate imbalances, the economy generates pressures that force further development through a chain of inducements.

1.2 Perroux's Growth Pole Theory

François Perroux introduced the concept of the "Growth Pole" (Pôle\ de\ croissance). He argued that development does not appear everywhere at once, but rather at "poles" with varying intensities.

Propulsive Industries: Large, innovative, and fast-growing firms that exert a dominant influence over other firms.
Polarization Effects: The tendency for economic activities and resources to be drawn into the growth pole because of external economies and agglomeration benefits.

1.3 Myrdal's Cumulative Causation

Gunnar Myrdal expanded on polarization by explaining why regional inequalities tend to worsen. He identified two counteracting forces:

Backwash Effects: The negative impact on the "periphery" (rest of the country) as capital, skilled labor, and resources migrate toward the "center" (the pole).
Spread Effects: The positive impact where the growth of the center eventually leaks into the periphery through increased demand for raw materials and agricultural products.
Myrdal argued that in a market economy, backwash effects usually outweigh spread effects, leading to widening regional gaps unless the state intervenes.

2. Theory of Regional Domination

The theory of regional domination focuses on the asymmetrical power relationship between different geographical areas. It suggests that the underdevelopment of certain regions is not a natural state but a direct result of the dominance exerted by more advanced regions.

2.1 The Concept of the Dominant Region

A region is considered dominant when its economic decisions, production levels, and price structures significantly influence other regions' economies without those other regions being able to reciprocate.

The Center (Metropolis): The dominant region, characterized by advanced technology, diverse industry, and political power.
The Periphery (Satellite): The dominated region, which is often reduced to a supplier of raw materials and cheap labor.

2.2 Mechanism of Domination

Inelasticity of Demand: The center produces manufactured goods with high income elasticity, while the periphery produces primary goods with low income elasticity. This leads to a long-term deterioration in the terms of trade for the periphery.
Extraction of Surplus: Capital generated in the periphery is often reinvested in the center rather than locally, a process sometimes called "internal colonialism."
Decisional Dependency: Key economic and financial decisions affecting the periphery are made by corporations or banks located in the center, ensuring the periphery's development remains subordinate to the center's needs.

2.3 Structural Distortion

Regional domination often leads to a distorted economic structure in the periphery. Instead of an integrated local market, the periphery's infrastructure (roads, railways) is often designed solely to export resources to the center, preventing internal regional growth and reinforcing the dominance of the core.

1. Theories of Unbalanced (Polarized) Development

1.1 Hirschman's Strategy of Unbalanced Growth (1958)

Albert O. Hirschman argued that the primary bottleneck in developing nations is the lack of decision-making ability and entrepreneurial spirit, not just a lack of resources. His policy focuses on creating chain reactions through specific investments.

Backward Linkages: The demand an industry creates for inputs from other sectors.
Forward Linkages: The supply an industry provides which becomes inputs for other sectors.
Policy of Disequilibrium: By creating deliberate imbalances, the economy generates pressures that force further development through a chain of inducements.

1.2 Perroux's Growth Pole Theory (1955)

François Perroux introduced the concept of the "Growth Pole" (Pôle\ de\ croissance). He argued that development does not appear everywhere at once, but rather at specific nodes.

Policy of Propulsive Industries: Focus on large, innovative, and fast-growing firms that exert a dominant influence over other firms.
Polarization Effects: The tendency for economic activities and resources to be drawn into the growth pole because of external economies and agglomeration benefits.

1.3 Myrdal's Cumulative Causation (1957)

Gunnar Myrdal explained why regional inequalities tend to worsen, suggesting that market forces often widen the gap between regions.

Backwash Effects: The negative impact on the "periphery" (rest of the country) as capital, skilled labor, and resources migrate toward the "center" (the pole).
Spread Effects: The positive impact where the growth of the center eventually leaks into the periphery through increased demand for raw materials.
Policy of State Intervention: Myrdal argued that because backwash effects usually outweigh spread effects, the state must intervene to prevent widening regional gaps.

2. Theory of Regional Domination

2.1 The Concept of the Dominant Region

The Center (Metropolis): The dominant region, characterized by advanced technology, diverse industry, and political power.
The Periphery (Satellite): The dominated region, which is often reduced to a supplier of raw materials and cheap labor.

2.2 Mechanism of Domination

Inelasticity of Demand: The center produces manufactured goods with high income elasticity, while the periphery produces primary goods with low income elasticity. This leads to a long-term deterioration in the terms of trade for the periphery.
Extraction of Surplus: Capital generated in the periphery is often reinvested in the center rather than locally, a process sometimes called "internal colonialism."
Decisional Dependency: Key economic and financial decisions affecting the periphery are made by corporations or banks located in the center, ensuring the periphery's development remains subordinate to the center's needs.