Hirschman's unbalanced strategy. A study of linkage effects in a developing economy: The case of Nigeria

The primary objective of this study is to use the Hirschman Intersectoral Linkage proposal to ascertain the degree and nature of the intersectoral relationship in the Nigerian economy prior to the emergence of oil as the dominant sector of the economy. An analysis of the Nigerian economy with the aid of an input/output table reveals that a bias toward certain sectors exist and that Nigeria's early development experience mirrored sectoral imbalances. The empirical results show that prior to the take off of the oil sector in Nigeria, the economy was not diversified. Fifty percent of the sectors according to the input/output table, contributed over 30 percent to total Gross Domestic Product (GDP), but had little or no backward or forward linkages with other sectors. Empirical evidence also showed that there was little or no influence by occurrences in other sector(s) of the Nigerian economy and therefore were in no position to have any significant impact on the rest of the economy. This study sought to address the concept of linkages as a powerful tool in economic development and to provide useful guidance to policy makers as to what areas of economic activity can be pursued in the drive toward economic development. This study challenges the proposition that the usefulness of the linkage effect lies in the guidance it provides with respect to alternatives that arise in the course of development rather than the design of any rigid sequence that might be derived from it. It is our understanding that the principle of unbalanced development is to facilitate the allocation of national resources to the most dynamic sectors. The contribution of this research to the study of economic development is that it provides a start up point in the tedious process of identifying where action is needed most urgently in the development process of a developing economy.