Hirschmanian Themes of Social Learning and Change

Abstract

Albert Hirschman developed his strategy of unbalanced growth in response to the postwar theories of the big push, development planning, and balanced growth. Ellerman translates today's debate about the effectiveness of conditionality and adjustment lending back into the old debate about balanced versus unbalanced growth.

Many development strategies assume (or desperately hope) that a country already has the capacity to plan and implement institutional reform or that such reform can be pushed through with the external pressures of aid and conditionalities. In a decentralized reform strategy, developmental change is induced not by government fiat but by releasing and channeling local energies in smaller projects that will in due course spread through links, learning, imitation, and benchmarking.

A Christmas tree of conditionalities hung on an adjustment loan is generally ineffective in getting a country to develop ownership of reform or in generating sustainable change. Development agencies need to work toward client governments' genuine commitment to policy reform rather than believe that they can buy such commitment with aid money.

But how does a country get from here to there? Here is where the Hirschmanian notion of unbalanced growth can be rediscovered. A country that has already developed a good policy environment is like a country that can implement the balanced growth plans of the earlier debate. Such a country would be well on its way to development.

When the central government lacks such a capability, the Hirschmanian approach is to look for hidden rationalities in small areas or on the periphery and then help the small beginnings to spread - using, where possible, the natural pressures of linkages. Rather than try to put all the pieces of a jigsaw puzzle together at once to make it look like the picture on the box, one starts in the small areas where the pieces are starting to fit together and builds outward, using the links between the pieces.

Ellerman shows several authors arriving at a similar strategy from different starting points. Similar ideas underlie the Japanese system of just-in-time production based on inventory, local problem solving, benchmarking, and continuous improvement; Charles Lindblom's theory of incrementalism and muddling through; Donald Schon and Everett Rogers's treatment of decentralized social learning; and Charles Sabel's theory of learning by monitoring.

This paper - a product of the Office of the Vice President and Chief Economist, Development Economics - is part of a larger effort in the Bank to improve aid effectiveness. The author may be contacted at [e-mail].