III.

Gerschenkron's Theory

Russian-born economist Alexander Gerschenkron introduced the concept of relative backwardness, in which the development path of a late industrializing country will, by the virtue of its backwardness, differ fundamentally from that of the leading industrial country. He theorized that the late industrializer displays the following characteristics: a rapid and intense growth of industrial output; an emphasis on producer goods (goods used to make other products) rather than consumer goods (products sold directly to consumers); a stress on large-scale plant and enterprise; a reliance on technological borrowing, and probably on financial assistance from abroad; importance of the government as the promoter of industrial development; spread of ideologies supportive of industrialization; and a passive role for agriculture. Although historical case studies of many European economies have failed to verify many of these descriptive features, Gerschenkron's perspective has had significant influence on the study of the industrialization process. Most economists accept Gerschenkron's theory that historical events influence the path of industrialization.