''The Strategy of Economic Development'' is a 1958 book on economic development by

Albert O. Hirschman Albert Otto Hirschman (born ''Otto-Albert Hirschmann''; April 7, 1915 – December 10, 2012) was a German economist and the author of several books on political economy and political ideology. His first major contribution was in the area of de ...

. Hirschman critiques the theories of balanced growth put forward by Ragnar Nurkse and

Paul Rosenstein-Rodan Paul Narcyz Rosenstein-Rodan (1902–1985) was an economist of Jewish origin born in Kraków, who was trained in the Austrian School, Austrian tradition under in University of Vienna, Vienna. His early contributions to economics were in pure eco ...

, which call for simultaneous, large-scale increases in investment across multiple sectors to spur economic growth. Hirschman argues that such strategies are unrealistic and often infeasible in underdeveloped countries. In place of balanced growth, Hirschman proposes a theory of ''

unbalanced growth Unbalanced growth is a natural path of economic development. Situations that countries are in at any one point in time reflect their previous investment decisions and development. Accordingly, at any point in time desirable investment programs tha ...

'', where "imbalances" and "pressure points" created by the growth process can be used to identify areas where policymakers can intervene. In addition, Hirschman introduces the notions of backward linkages---the demand created by a new industry for intermediate goods---and forward ones---the knock-on effects on industries who use the present industry's goods as inputs. Along with Arthur Lewis's ''Theory of Economic Growth,'' and Walt Rostow's '' Stages of Economic Growth'', the ''Strategy'' is often considered one of the seminal works of development economics.

References

Books about economic growth Economic theories Economic development Development economics {{econ-book-stub