Rev Austrian Econ (2006) 19: 217–226
Poverty traps and the robust political economy of
Scott A. Beaulier · J. Robert Subrick
Springer Science + Business Media, Inc. 2006
Abstract Robust political economy emphasizes the lack of benevolence and omniscience
of would be reformers. In addition, we consider the effects of biased decision-making for
the robustness of the policy implications. This paper examines the robustness of the policy
implications of models based on coordination failures and poverty traps. In particular, we
address the revival in ‘big push’ type models and its policy implications. We argue that
attempts to promote economic development through ‘big push’ models lack robustness.
Keywords Big Push
JEL Code O1, O20, P26, P41
The success of the Marshall Plan in Western Europe and the rapid industrialization of the
Soviet Union led many development economists to argue in favor of state-led planning after
the Second World War. Concomitant changes in economic theory provided further support for
A different type of economics was necessary to understand developing
Inspired by Keynesian ideas, the new development economics that emerged in
the post-World War II period recognized the pervasive imperfections in markets, the fact
S. A. Beaulier (
Stetson School of Business & Economics, Mercer University, 1400 Coleman Ave., Macon, GA 31207
J. R. Subrick
Carow Hall 11C, George Mason University, 4400 University Drive, MSN 1D3, Fairfax, VA 22030-4444
Easterly (2002 ) provides a nice summary of post-WWII state-led development planning.
See Hirschman (1981, chapter 1) for a masterful summary of these developments.