Some thoughts on the implications of increasing returns for economic development

Abstract

"This paper argues that the economics of increasing returns has shed important light on our understanding of various aspects of development. What it has not done so far, however, is generate a list of prescriptive remedies parallel to those advanced by the proponents of neo-liberalism. The paper suggests that this is in part because the effectiveness of its analysis depends on its being place and time specific and contingent on a range of institutional and cultural factors. This, it is argued, should not be allowed to prevent a fuller consideration of its implications for policy. However, given that simple rule based intervention is likely to be inappropriate, it is important to think of ways in which collective action can be organised so as to economize on entrepreneurial and organisational ability."(pg 1)