This paper examined the implication of Big-Push theory on Nigerian economic development. The theory provided an explanation of how developing countries can industrialize through broad-based investment and coordination. The paper looked at the meaning of Big-Push theory, assumptions and its implication on Nigeria economic development.
If the need for a Big Push to survive in an economy that is open to international trade and capital movements, or if openness to trade and capital movements is sufficient to overcome all poverty traps, these questions have daunted development economics since its inception. The theory of the big push asserts that underdeveloped countries require large amounts of investments to come out of the problem of backwardness and launch policies for economic development. The logic behind this theory is that a programme of “bit-by-bit” investment will not have much impact on the process of growth and will only lead to a dissipation of resources. Policies designed to encourage the development of the Nigerian economy will need to be guided by the big-push theory.
Table of Contents
INTRODUCTION
Concept of Development
Concept of Economic Development
Theory of the Big Push to Economic Development
Indivisibility in the Production Function
Indivisibility (or Complementarities) of Demand
Indivisibility in the Supply of Savings
Assumptions of Big Push Theory
Implications of Big-Push theory on Nigerian Economic Development
Conclusion
Research Objectives and Themes
The primary objective of this paper is to examine the implications of the Big-Push theory on the economic development of Nigeria, specifically analyzing whether massive coordinated investments can effectively overcome the country's development challenges.
- Conceptual foundations of economic development and growth.
- The theoretical mechanics of Rosenstein-Rodan’s Big-Push model.
- Indivisibilities in production, demand, and savings as bottlenecks.
- Practical challenges of implementing large-scale industrialization in the Nigerian economic context.
- The potential neglect of the agricultural sector and its inflationary consequences.
Excerpt from the Book
Theory of the Big Push to Economic Development
The big push model is a concept in development economics or welfare economics that emphasizes that a firm's decision whether to industrialize or not depends on its expectation of what other firms will do. It assumes economies of scale and oligopolistic market structure and explains when industrialization would happen. The originator of this theory was Paul Rosenstein-Rodan in 1943. According to the author, the need for big push in underdeveloped countries arises from at least three indivisibilities, including:
1. Indivisibility in the production function;
2. Indivisibility of demand; and
3. Indivisibility in the supply of savings (Misra & Puri,2010).
Summary of Chapters
INTRODUCTION: Provides an overview of development economics and the Big-Push theory while defining fundamental concepts of development.
Concept of Development: Discusses historical definitions of development and the transition from colonial economic models to modern development goals.
Concept of Economic Development: Explores traditional versus modern approaches to measuring and defining economic development, focusing on national product growth and social welfare.
Theory of the Big Push to Economic Development: Outlines the core pillars of the theory, including the three critical indivisibilities that necessitate coordinated investment.
Assumptions of Big Push Theory: Lists the theoretical framework conditions, such as a closed economy and perfect competition, under which the model operates.
Implications of Big-Push theory on Nigerian Economic Development: Analyzes the practical obstacles for Nigeria, highlighting potential conflicts with agricultural focus and implementation difficulties in a mixed economy.
Conclusion: Synthesizes the findings, noting that Nigeria lacks the internal capital for such a push, thus justifying the need for external financing.
Keywords
Big-Push theory, economic development, industrialization, indivisibility, production function, demand, savings, Nigeria, economic growth, investment, poverty trap, foreign aid, social overhead capital, agriculture, mixed economy.
Frequently Asked Questions
What is the core focus of this research paper?
The paper evaluates the applicability of the Big-Push theory in the context of Nigeria’s economic development, assessing whether coordinated, large-scale investment strategies can solve the nation's developmental stagnation.
What are the central themes of the work?
The central themes include the mechanics of the Big-Push model, the role of social overhead capital, the necessity of simultaneous industrialization, and the economic risks of ignoring the agricultural sector.
What is the primary research goal?
The goal is to determine if the Big-Push hypothesis, which suggests that massive investment is required to overcome a "poverty trap," is a viable framework for the Nigerian economy.
Which scientific methodology is employed?
The research utilizes a theoretical and analytical literature-based methodology, examining established economic theories and applying them to the current socio-economic structure of Nigeria.
What topics are covered in the main body of the text?
The main body covers the theoretical pillars (indivisibilities of production, demand, and savings), the specific assumptions of the model, and a critical analysis of why the Nigerian implementation faces structural difficulties.
Which keywords best characterize the work?
Key terms include Big-Push theory, economic development, industrialization, capital requirements, and foreign aid.
Why does the author argue that agriculture is critical in the implementation process?
The author highlights that neglecting agriculture in favor of industrialization can lead to food shortages and inflationary pressure, which ultimately threatens long-term economic stability.
What is the conclusion regarding foreign aid?
The author concludes that because Nigeria lacks the sufficient internal capital for a "big push," the hypothesis acts as a primary justification for seeking foreign aid and external financing.
- Citation du texte
- Erhunse Confidence (Auteur), 2020, Implication of Big-push theory on Nigerian economic development, Munich, GRIN Verlag, https://www.grin.com/document/520284
