Unbalanced Development

Balance is a powerful idea in economics—in equilibrium economics, in strategies of balanced growth, and many other strategies. This chapter argues for a different understanding of the history of capitalism and, therefore, of policy and strategy. The idea of imbalance is a springboard to explore the ideas of Albert Hirschman. These include the concept of linkages and the dynamics of unbalanced growth (pressures, tensions, and disequilibrium as the motor of change), the principle of the hiding hand, and a focus on unintended consequences and poorly measured side effects of development projects and policies. In line with Hirschman’s ‘possibilism’, we argue that the critiques of large ‘mega-projects’ are misleading. Hirschman also highlighted the difference between economists who think a country’s prospects are determined by its ‘endowments’ (what it is and has) and those more interested in what a country does and becomes through what it does.