12 Limitations of the big push (development) theory in developing countries
- 1. Inadequate There is limited capital necessary to massively invest in industrial development and infrastructure. This limits the implementation of the big push growth strategy.
- Low levels of technology. The use of outdated technology by various industries increases the production costs in form of capital consumption allowance hence limiting the strategy.
- Unfavorable government policies in form of high taxes, and lack of clear policy guidelines concerning investment in developing countries. This makes it difficult to set up various industries due to high costs of operation hence limiting the strategy.
- Economic instabilities. For example high levels of inflation, exchange rate fluctuations, fluctuations in the supply of raw materials etc. Such instabilities limit the implementation of the big push growth strategy in developing countries.
- Poor and inadequate social and economic infrastructural facilities. This is reflected in form of poor transport network, poor storage facilities, shortage of power supply and limited financial institutions. This makes it difficult to carry out production activities hence limiting the strategy.
- Limited entrepreneurship skills. This is due to limited skilled manpower required to invest in various industries making it difficult to implement the strategy
- High levels of corruption and embezzling of public funds. This leads to misuse of funds meant for industrial investment for personal gains hence limiting the strategy
- Limited domestic and foreign markets. This is due to low aggregate demand resulting from high levels of poverty in developing countries. This makes it difficult to sustain large scale production hence limiting the strategy,
- Poor investment climate in form of rampant political instabilities. This discourages potential investors from setting up a number of large scale industries due to fear of losing life and property.
- Limited basic natural resources. The short supply of natural resources like oil and coal makes it difficult to carry out large scale industrial investment hence limiting the strategy.
- Limited foreign exchange earnings due to the trade barriers and poor quality exports from developing countries. This makes it difficult to import machinery and other raw materials required for the big growth strategy.
- It emphasizes industrialization and neglects the role of agricultural in the development process of developing countries.
CATEGORIES Economics
TAGS Dr. Bbosa Science
