Rosenstein-Rodan’s framework

　　Another important question has been to understand how technological

　　diffusion takes place across countries and generates or sustains growth—

　　and why it does not take root in others. Various interesting possibilities

　　have recently been explored in an attempt to answer that critical question

　　(Jones 1998; Acemoglu, Johnson, and Robinson 2001; Glaeser and

　　Shleifer 2002). Both on the theoretical and empirical fronts, progress has

　　been made in our understanding of growth in recent decades. However,

　　growth research still faces signifi cant methodological diffi culties and challenges

　　in identifying actionable policy levers to sustain and accelerate

　　growth in specifi c countries. Intellectual progress has been even slower

　　in the particular domain of development theories. It took a paper by

　　Rosenstein-Rodan (1943) to bring development issues to the forefront of

　　the discipline. The paper suggested that the virtuous circle of development

　　depended essentially on the interaction between economies of scale at the

　　level of individual fi rms and the size of the market. Specifi cally, it assumed

　　that modern methods of production can be made more productive than

　　traditional ones only if the market is large enough for their productivity

　　edge to compensate for the necessity of paying higher wages. But the size of

　　the market itself depends on the extent to which these modern techniques

　　are adopted. Therefore, if the modernization process can be started on a

　　very large scale, then the process of economic development will be selfreinforcing

　　and self-sustaining. If not, countries will be indefi nitely trapped

　　in poverty.

　　Rosenstein-Rodan’s framework sparked a wave of similar ideas (Chang

　　1949; Lewis 1954; Myrdal 1957; Hirschman 1958) which came to be

　　known as the structuralist approach to economic development. These early

　　development theories held that the market encompassed insurmountable

　　defects and that the state was a powerful supplementary means to accelerate

　　the pace of economic development (Rosenstein-Rodan 1943; Nurkse 1953;

　　Hirschman 1958). The slump of international trade in the Great Depression

　　led to export pessimism in the post-War period. In Latin America, for

　　instance, political leaders and social elites were infl uenced strongly by the

　　deterioration in the terms of trade, the economic diffi culty encountered

　　during the Great Depression in the 1930s, and the thesis developed by

　　Prebisch (1950) and Singer (1950). They believed that the decline in the

　　terms of trade against the export of primary commodities was secular and

　　led to the transfer of income from resource-intensive developing countries

　　to capital-intensive developed countries. They argued that the way for a

　　developing country to avoid being exploited by developed countries was

　　to develop domestic manufacturing industries through a process known as

　　import substitution. Moreover, the emergence of previous colonies or semicolonies

　　as newly independent states in Asia and the Middle East, and later

　　in Africa, was accompanied by strong nationalist sentiments.

本文摘自《新結構經濟學》

---

　　 Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this framework as well as concrete advice to development practitioners.