3/16/13

[Economy 4 Newbies] Backwash and Spread Effect in Economic Development by Puneeth Mrunal

[Economy 4 Newbies] Backwash and Spread Effect in Economic Development by Puneeth

All credit to Puneetg of IOforum for this article.
Q. What is Backwash effect?
Ans. It is an economic development effect suggested by Swedish economist Gunnar
Myrdal. It basically means that
if one particular area in a country starts growing or developing, it causes people,
human capital as well as physical capital (infrastructure, finance, machines etc.) from
other parts of the country to gravitate towards this growing centre.
This essentially leaves the other areas worse off than before because their best brains
and capital leave them to go to the growing centre. It means that growth in one area
adversely affects the growth in the other.
For instance, in India, lets say
Delhi is the developing centre with all the companies being set up there.
Then people from all over Haryana, Punjab, UP, Bihar etc. have a tendency to move to Delhi because all companies are located
there and better employment opportunities exist.
So Delhi will grow but the remaining areas will be worse off. This is Backwash effect.
Counter to the Backwash Effect is the

Spread Effect
also discussed by Myrdal. Here,
development in one place, spreads to its suburbs and all the adjoining areas.
Again taking the example of Delhi, we could argue that suburbs like Faridabad, Gurgaon, Ghaziabad etc. have benefited from
Delhis growth due to the Spread Effect caused by Delhis growth.
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5 comments to [Economy 4 Newbies] Backwash and Spread Effect in Economic Development by

Puneeth

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vikas
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the above link doesnt lead to any where

vikas
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[Economy] LIST of All Articles published by me to clear the basic concepts of Economy for any recruitment exam or interview Mrunal
is not leading to desired page
mrunal.org/2010/01/economy-4-newbies-backwash-and-spread.html

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3/16/13

[Economy 4 Newbies] Backwash and Spread Effect in Economic Development by Puneeth Mrunal

adi
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backlash effect seems to be local version of brain drain.

Natasha
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sir this link is not showing anything.. check this

[Economy] LIST of All Articles published by me to clear the basic concepts of Economy for any
recruitment exam or interview Mrunal
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[...] Backwash and Spread Effect in Economic Development by Puneeth [...]

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