M A IV SEM (M U )Topic: circular cumulative causation by Gunnar Myrdal. ( 2 theory of regional

development )

By Dr. Bhawana NIGAM

Dept. of Geography

A N College, Patna.

Introduction.

• Circular cumulative causation is a theory developedby Swedish economist Gunnar Myrdal in the year1956.

• It is a multi-causal approach where the core variablesand their linkages are delineated.

• The idea behind it is that a change in one form of aninstitution will lead to successive changes in otherinstitutions.

• These changes are circular in that they continue in acycle,, in which there is no end, and cumulative inthat they persist in each round.

• The change does not occur all at once as that wouldlead to chaos, rather the changes occur gradually.

The discussion• Myrdal maintains that economic development

results in a circular causation process leading to rapid development of developed countries

• While the weaker countries tend to remain behind and poor .

• Myrdal believes that international and interregional economic relations in practice involve unequal exchanges in the sense that the weak is always exploited by the strong.

• He describes the backwash effects of migration, capital movement and trade in the backward regions

• THE MAIN CAUSE OF BACKWARDNESS AND REGIONAL DISPARITIES HAS BEEN THE STRONG BACKWASH EFFECT And WEAK SPREAD EFFECTS.

• Developed region is developing at a fasterrate at the cost of backward region.

• Income earned by developed region is notreinvested in backward regions

• But is relocated to the developedsectors/regions leading to moredevelopment in these areas.

• Spread effect continues to become strongerin developed countries

• While backward effect continued to becomeeven more spread in backward countries.

The nodal-hinterland relation.

• There was some spread effect from nodalregions to the hinterland.

• The hinterland supplies raw material, labour,etc. To the centres of development

• And in turn receive consumer goods andservices.

• However, these spread effects never helpedin self-expansion process in rural areas.

CUMULATIVE CAUSATION THEORY OF ECONOMIC DEVELOPMENT

• The cumulative causation action has beenbuilt upon spread effect and backwasheffects.

• The theory emphasizes that “poverty isfurther perpetuated by poverty” (bwe >spe) and “affluence is further promotedby affluence” (spe>bwe).

• In backward regions problem creates moreproblems.

• In developed regions auto-solutions solveall problems

• Myrdal contention is that the free play ofmarket forces and operation of profitmotive in the capitalist system normallytends to increase inequalities betweenregions rather than decrease.

• When backwash effect dominatesdivergence will develop; periphery willremain weak, only center will developand dualism in growth is promoted.

• When spread effect dominatesconvergence will develop; periphery willdevelop, there will be economicintegration between Centre andperiphery.

• CUMULATIVE CAUSATION THEORY PROVES THAT

• Market mechanism will not bring equality betweenregions but will increase inequalities.

• Nothing short of govt. Intervention will checkbackwash effect from getting cumulative.

• The theory is Centre periphery model because

• The favourable effects flow from Centre to periphery.

• Periphery supplies raw material and human power toCentre.

• Centre supplies finished output for consumption andinput.

CRITICAL EVALUATION

• This model combines national andinternational forces

Which tend to keep backward countries in thetrap of cumulative process where povertybecomes its own cause.

• Though not a communist he proved that theso called competitive markets instead ofsolving the problem of backward region itwould accentuate them.

• Myrdal have made important contributions tothe theories of convergence and divergence,

• Agglomeration and locational economies andthe theory of vicious circle.

•Thanks..