Myrdal’s Circular Cumulative Causation Theory
Definition:
Circular cumulative causation is a theory developed by Swedish economist Gunnar Myrdal in
the year 1956. It is a multi-causal approach where the core variables and their linkages are
delineated. The idea behind it is that a change in one form of an institution will lead to
successive changes in other institutions. These changes are circular in that they continue in a
cycle, many times in a negative way, in which there is no end, and cumulative in that they persist
in each round. The change does not occur all at once as that would lead to chaos, rather the
changes occur gradually.
To put Myrdal’s view in a better perspective let us see what he has to say on the subject.
According to Myrdal,-
“if things were left to market forces unhampered by any policy interferences, industrial
production, commerce, banking, insurance, shipping and indeed almost all those economic
activities which in developing economy tend to give a bigger than average return and, in
addition, science, art, literature, educational higher culture generally – would cluster in certain
localities and regions, leaving the rest of the country more or less in a backwater”. By whatever
factors-natural, manmade, or historical space growth gets started in a particular regions and
meets with initial success, all sorts of economic and non-economic activities start concentrating
there. This happens because of ever increasing internal and external economies – interpreted in
the widest sense of the word to include, for instance, a working of population trained in a various
crafts, easy communications, the feeling of growth and elbow room and the spirit of new
enterprise”.
In Myrdal’s analysis, the growth in progressive (or advancing) regions affects the growth in
lagging (or depressed) regions through:
(i) Spread effects and,
(ii) Backwash effects.
The spread effects are the centrifugal forces of expansionary momentum emanating from the
centres of economic expansion to other region. Thus, the spread effects have a positive impact on
the development of other region.
Because of growth in the progressive region, on the one hand, demand for agricultural products
and raw material from other regions in increased, and on the other, advanced technology is made
available to lagging regions which they did not formally processes. On account of these two
factors, growth in the other regions is promoted. In contrast to the spread effect, the backwash
