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Big Push Theory And Unbalance Growth Theory

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CHAPTER TWO
LITERATURE REVIEW
2.1 Theoretical framework
The theoretical basis of this study centers on:
 Big push theory
 Balance growth theory
 Unbalance growth theory

2.1.1 The Big push theory
According to PaulRosensten-Rodan (1943), Big push model is a theory that emphasizes that underdeveloped countries required large amount of investments to embark on the path of economic development from the present state of backwardness.
This theory is of the view that ‘bit by bit’ investment programmed will not lead to the path of economic development, rather through investing a specific amount can help in economic development.
The theory is also of the view that in order for a country to achieve economic development, there must exist three indivisibilities in underdeveloped countries:
i. Indivisibilities in production function: In establishing so many …show more content…

Social overhead comprises of those basic activities, without which primary, secondary, tertiary productive activities cannot functions, this includes communication, investment in public health, education, transportation and conventional public utilities such as electricity, water etc. this theory suggest that investing so much in social overhead activities will bring about increase in private investment in the form of direct productive activities (DPA). SOC investment indirectly subsidizes agriculture by cheapening various inputs which they use or reducing costs. The SOC approach to economic development is explained that by unbalancing the economy, investment in DPA will be stimulated.
For the sake of this study, the unbalance growth theory of economic development will be adopted; this is because the unbalance growth theories of economic development explained that unbalancing the economy using a pre-design strategy will lead to the path of economic

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