Distinguish between backwash effects and spread effects. Are these the same as vicious circles and virtuous circles? How do these two ideas of Myrdal’s relate to the concept of cumulative causation?
The correct answer and explanation is:
Backwash Effects vs. Spread Effects
Backwash effects and spread effects are concepts introduced by Swedish economist Gunnar Myrdal in his theory of cumulative causation. These effects describe the unequal economic development between regions due to market forces.
- Backwash Effects: These are negative effects that occur when economic growth in a developed region drains resources—such as labor, capital, and talent—from less developed regions. This process can lead to increased regional disparities, as underdeveloped areas struggle to compete. Migration, capital outflow, and market dominance by richer regions reinforce the disadvantages of poorer areas.
- Spread Effects: In contrast, spread effects are positive influences that help less developed regions grow due to the success of advanced regions. These include technology diffusion, investment spillovers, and increased demand for goods and services from peripheral areas. Such effects can lead to regional convergence and balanced development.
Vicious Circles vs. Virtuous Circles
Vicious and virtuous circles describe self-reinforcing processes:
- Vicious Circles: When backwash effects dominate, poor regions fall into a cycle of decline—low investment, low productivity, and continued underdevelopment.
- Virtuous Circles: When spread effects prevail, economic growth leads to further development, increasing income, investment, and opportunity.
Connection to Cumulative Causation
Myrdal’s concept of cumulative causation suggests that economic disparities tend to grow over time unless deliberate intervention occurs. When backwash effects outweigh spread effects, disparities widen, leading to a vicious circle. If spread effects are strong, they create a virtuous circle, reducing inequalities and fostering inclusive growth.
Thus, backwash effects correspond to vicious circles, while spread effects align with virtuous circles—both key aspects of Myrdal’s theory of cumulative causation.
Now, I’ll generate an image illustrating these ideas.
Here’s the infographic illustrating Gunnar Myrdal’s concepts of Backwash Effects, Spread Effects, Vicious Circles, and Virtuous Circles. Let me know if you’d like any modifications or further explanations!
