12 Limitations of the big push (development) theory in developing countries

12 Limitations of the big push (development) theory in developing countries

  1. 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.
  2. 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  The use of outdated   technology   by various   industries   increases   the production costs in form of capital consumption   allowance hence limiting the strategy.
  3. 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.
  4. 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.
  5.    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.
  6. Limited entrepreneurship skills. This is due to limited skilled   manpower   required   to invest in various industries making it difficult to implement the strategy
  7. 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
  8. 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,
  9. 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.
  10. 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.
  11. 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.
  12. It emphasizes industrialization    and neglects   the role of agricultural   in the development   process of developing   countries.
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