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- 1. Regional & Metropolitan Planning Dr. Mohammed Firoz . C Architect and Urbanist Department of Architecture and Planning National Institute of Technology Calicut, India
- 2. Theories and Techniques of Regional Development and Planning
- 3. 2. Theory of Cumulative causation
- 4. • Theory of Cumulative causation, proposed by Professor Gunnar Myrdal who has received more than thirty awards in his lifetime including the Nobel Prize in 1974 for his ‘pioneering work in the ‘theory of money and economic fluctuations and penetrating analysis’ of the interdependence of economic, social and institutional phenomena. • Prof. Gunnar Myrdal maintains that economic development results in a circular causation process leading to rapid development of developed countries while the weaker countries tend to remain behind and poor • The concept of Core and Periphery- Development and underdevelopment Cumulative causation Region A Adv: Region B Dis Adv: Give and Take
- 5. Cumulative causation • Developed Countries /Region are known as the core, and Low Developed Countries/Region are referred to as the periphery Core countries/Regions Periphery countries/Regions
- 6. Cumulative causation • Developed Countries /Region develop at the cost of Low Developed Countries/Region–Case example of Angola and Portugal- In return Angola also benefits- Concept of Colonialisation in India before 1947 ( A simplistic example)
- 7. Cumulative causation Un even development-Concept of Backwash effect and Spread effect What is the backwash effect? • Pulling off all dynamic elements to the growth center from the surrounding location is called the backwash effect. • Core grows –Attracts labour and brain drain from the periphery • Profit controlled by core- very little reaches the Periphery • Flow of raw materials and labour leaves the periphery at disadvantages
- 8. What is the spread effect? During the time, the growth center or the big cities/core regions began to decrease due to pollution and congestion or other reasons. It leads to pulling out the resources from big cities/core and there is a spread of development of the periphery region around this growth center. This effect is called the spread effect. Cumulative causation • Spread of wealth and Knowledge from core to periphery • Benefits of core starts to redistribute amongst the periphery • Narrows disparities. • Called as Centrifugal growth
- 9. Case study of Spread effect- Thailand –Japan Car industry Cumulative causation • In 1990’s due to extreme cost of car manufacture in Japan, many industries started to look for cheap labor and cost effective destinations • Factories started to relocate to Thailand • Jobs and investment flow for Thailand • Transfer of technologies to Thailand Illustration of Spread effect-Centrifugal Growth • Concept of Make in India • Industrial locations of IT/ITES/ Manufacturing hubs of Automobiles / smartphone in India and China –Gujarat-TN-Hariyana egs of such regions • Many US/Japan/EU companies started functioning their industries in India and China
- 10. Detailed demonstration : • On a regional scale, the introduction of a new industry/economic activity or the expansion of an existing industry /economic activity in an area also encourages growth in other industrial/economic sectors also. • This is known as the multiplier effect which in its simplest form is how many times money spent circulates through a country's economy. • Money invested in an industry helps to create jobs directly in the industry and locality , but it also creates jobs indirectly elsewhere in the economy. • New industrial development, for example, requires construction workers who themselves require housing, and services such as schools and shops. An increased demand for food will benefit local farmers who may increase their spending on fertiliser. • Workers employed directly in the new industry increase the local supply of skilled labour, attracting other companies who benefit from sharing this labour pool. Other companies who supply components or use the new industry's products are attracted to the area to benefit from reduced transport costs. • Spin-off effects include new inventions or innovations that may lead to further industrial development and new linkages. • Through this multiplier effect, an area can develop as a growth pole Cumulative causation
- 12. Growth pole further leads to development of Economic linkages and economic influence zone Cumulative causation
- 14. • The cumulative causation effect is mostly circular in nature. Hence it is also called as the circular cumulative causation effect. • Back wash effect and spread effect has far reaching application in international trade, regional development and much more • The main cause of Underdevelopment and backward effect is backwash effect and poor spread effect • Developed countries/Regions Vs Underdeveloped regions Cumulative causation Balancing the SPE & BWE is the challange
- 15. • Cumulative causation theory proves that ??? • Market mechanism will not provide equality, but will increase inequality • Government intervention and polices should address the same • Spread effect to be promoted by providing import surplus industries there by making the spread effect • Institutional reforms are mandatory for such changes. • Proper regional planning can increase the spread effect and reduce the Back wash effect. Cumulative causation