What is it in simple terms?

Invest in many industries at once so they become each other's customers.

Why is it criticised?

Poor countries lack the resources, and aid-led evidence is weak.

Big Push Theory

📈 Economics By CampusDown Wiki Editorial Team Last updated October 27, 2026 Views 1

Big push theory, proposed by Paul Rosenstein-Rodan, argues that a single industry fails for lack of demand in a poor economy, but coordinated large-scale investment across many industries lets each become a market for the others and escape underdevelopment.

Contents

1. Coordinated investment
2. Critique and models
3. Evidence
4. FAQ
5. References

Coordinated investment

Rosenstein-Rodan (1943) argued that one factory lacks buyers, but many together create demand; Nurkse (1953) called this balanced growth. Coordination failure produces a poverty trap.

Critique and models

Hirschman (1958) favoured unbalanced growth; Murphy, Shleifer and Vishny (1989) modelled multiple equilibria. It sits alongside the Lewis model.

Evidence

Sachs (2005) urged aid-led pushes; Easterly (2006) found weak evidence; Kline and Moretti (2014) studied the TVA. The idea informs middle-income trap debates.

FAQ

What is it in simple terms?: Invest in many industries at once so they become each other's customers.
Why is it criticised?: Poor countries lack the resources, and aid-led evidence is weak.

Sources reviewed: 2026-10-26

References

Rosenstein-Rodan, P. N. (1943). Problems of industrialisation of Eastern and South-Eastern Europe. Economic Journal, 53(210/211), 202–211. The paper that introduced the big push.
Nurkse, R. (1953). Problems of capital formation in underdeveloped countries. Oxford University Press. Sets out the balanced-growth argument.
Hirschman, A. O. (1958). The strategy of economic development. Yale University Press. The unbalanced-growth critique.
Murphy, K. M., Shleifer, A., & Vishny, R. W. (1989). Industrialization and the big push. Journal of Political Economy, 97(5), 1003–1026. The modern formalisation.
Sachs, J. D. (2005). The end of poverty: Economic possibilities for our time. Penguin Press. A modern case for aid-led big pushes.
Easterly, W. (2006). Reliving the 1950s: The big push, poverty traps, and takeoffs in economic development. Journal of Economic Growth, 11(4), 289–318. An empirical critique.
Kline, P., & Moretti, E. (2014). Local economic development, agglomeration economies, and the big push: 100 years of evidence from the Tennessee Valley Authority. Quarterly Journal of Economics, 129(1), 275–331. Evidence from the Tennessee Valley Authority.

Reports and materials that use this theory (Korean)

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Poverty TrapWhat a poverty trap is: self-reinforcing mechanisms that keep countries or households poor, the vicious circle, multiple equilibria, the big push and aid debate, Kraay–McKenzie's review, field experiments and the psychology of scarcity.📈 Economics Lewis Dual-Sector ModelWhat the Lewis dual-sector model is: development as surplus labour moving from a traditional sector to a capitalist sector, the Lewis turning point, extensions by Ranis–Fei and Harris–Todaro, East Asian evidence and assessments.📈 Economics Middle-Income TrapWhat the middle-income trap is: why fast-growing economies stall at middle income, its origin, the Lewis turning point and limits of imitation, evidence on growth slowdowns, skeptics' critiques, and research on innovation.📈 Economics Modernization TheoryWhat modernization theory is, its roots in Weber and Parsons's structural functionalism, Rostow's five stages of growth, the Lipset hypothesis, the dependency critique, and revised versions such as multiple modernities and Inglehart's work.👥 Sociology

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This article was last updated on October 27, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.