Uneven Growth: A Framework for Research in Development Economics

T he 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. This view has served us reasonably well in several circumstances, particularly those pertaining to macroeconomic models of long-term growth. An implicit view that growth is balanced across sectors, or something close to it, also underlies the notion of “trickle-down,” a stance that has strongly infl uenced development policy. Of course, we would all agree that balanced growth is an abstraction. In many developing countries, economic growth has been fundamentally uneven. First one sector, then another, then a third have grown rapidly but not all together. A list of some instances of this phenomenon would include software development; the outsourcing of services; quick compositional shifts between agriculture and other sectors; the rise of export processing zones; and others. 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. The fi rst part studies the ways in which uneven growth might arise and its implications for economic inequality. The second part studies reactions: how forces are set in motion to restore balance or perhaps even to thwart the growth process. To many, the former may appear unimportant without an appreciation for the latter, so let me state at the outset that Uneven Growth: A Framework for Research in Development Economics