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Uneven Growth: A Framework for Research in Development Economics

  • Debraj Ray

The textbook paradigm of economywide development rests on the premise of "balanced growth": that is, on the presumption that all sectors will grow in unison over time as a country gets richer. Of course, we would all agree that balanced growth is an abstraction. In many developing countries, economic growth has been fundamentally uneven. The question really is not whether growth is balanced -- it isn't -- but whether the abstraction is a useful one. For many important development questions, I believe the answer is no. This is why I would like to take the reality of "uneven growth" seriously and use it as an organizing device for a research program. I divide my research agenda into roughly two parts: the sources and nature of uneven growth, and the reactions to uneven growth -- how forces are set in motion to restore balance or perhaps even to thwart the growth process. To help us think about the effects of uneven growth, I present a version of Albert Hirschmann's tunnel parable: You're in a multi-lane tunnel, all lanes in the same direction, and you're caught in a serious traffic jam. After a while, the cars in the other lane begin to move. Do you feel better or worse? At first, movement in the other lane may seem like a good sign: you hope that your turn to move will come soon, and indeed that might happen. However, if the other lane keeps whizzing by, with no gaps to enter and with no change on your lane, your reactions may well become quite negative. Unevenness without corresponding redistribution can be tolerated or even welcomed if it raises expectations everywhere, but it will be tolerated for only so long. Thus, uneven growth will set forces in motion to restore a greater degree of balance, even (in some cases) actions that may thwart the growth process itself.

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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 24 (2010)
Issue (Month): 3 (Summer)
Pages: 45-60

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Handle: RePEc:aea:jecper:v:24:y:2010:i:3:p:45-60
Note: DOI: 10.1257/jep.24.3.45
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  1. Baland, Jean-Marie & Ray, Debraj, 1991. "Why does asset inequality affect unemployment? A study of the demand composition problem," Journal of Development Economics, Elsevier, vol. 35(1), pages 69-92, January.
  2. Anirban Mitra & Debraj Ray, 2014. "Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India," Journal of Political Economy, University of Chicago Press, vol. 122(4), pages 719 - 765.
  3. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
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  5. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-37, October.
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  7. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
  8. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
  9. Markusen, James R, 1986. "Explaining the Volume of Trade: An Eclectic Approach," American Economic Review, American Economic Association, vol. 76(5), pages 1002-11, December.
  10. Ljungqvist, Lars, 1993. "Economic underdevelopment : The case of a missing market for human capital," Journal of Development Economics, Elsevier, vol. 40(2), pages 219-239, April.
  11. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1561-1602, November.
  12. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
  13. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
  14. Majumdar, Mukul & Mitra, Tapan, 1982. "Intertemporal allocation with a non-convex technology: The aggregative framework," Journal of Economic Theory, Elsevier, vol. 27(1), pages 101-136, June.
  15. Hirschman, Albert O & Rothschild, Michael, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic Development; with a Mathematical Appendix," The Quarterly Journal of Economics, MIT Press, vol. 87(4), pages 544-66, November.
  16. Mani, Anandi, 2001. " Income Distribution and the Demand Constraint," Journal of Economic Growth, Springer, vol. 6(2), pages 107-33, June.
  17. Austen-Smith, David & Banks, Jeffrey S., 2002. "Costly signaling and cheap talk in models of political influence," European Journal of Political Economy, Elsevier, vol. 18(2), pages 263-280, June.
  18. Francesco Caselli & Wilbur John Coleman II, 2006. "On the theory of ethnic conflict," LSE Research Online Documents on Economics 3561, London School of Economics and Political Science, LSE Library.
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