3.1 Expectations and Development
Consider the role of expectations. Rosenstein-Rodan (1943) and Hirschman (1958) (and
several others following them) argued that economic development could be thought of as
a massive coordination failure, in which several investments do not occur simply because
other complementary investments are similarly depressed in the same bootstrapped way.
Thus one might conceive of two (or more) equilibria under the very same fundamental
conditions, “ranked” by different levels of investment.