Paul Rosenstein-Rodan

Who was Paul Rosenstein-Rodan?

Paul Narcyz Rosenstein-Rodan was an economist of Jewish origin born in Kraków, who was trained in the Austrian tradition under Hans Mayer in Vienna. His early contributions to economics were in pure economic theory – on marginal utility, complementarity, hierarchical structures of wants and the pervasive Austrian School issue of time.

Rosenstein-Rodan emigrated to Britain in 1930, and taught at University College London and then at London School of Economics until 1947. He then moved to the World Bank, before moving on to MIT, where he was a professor from 1953 to 1968.

He is the author of the 1943 article "Problems of Industrialisation of Eastern and South-Eastern Europe" – origin of the “Big Push Model” theory – in which he argued for planned large-scale investment programmes in industrialisation in countries with a large surplus workforce in agriculture, in order to take advantage of network effects, viz economies of scale and scope, to escape the low level equilibrium "trap". He thus developed a theme laid out by Allyn Young in his 1928 article "Increasing Returns and Economic Progress", in which the latter himself expanded a theme formulated by Adam Smith in 1776.