Advantage and disadvantage reinforce themselves: a group or region that falls behind tends to fall further behind, unless something breaks the circle.
Myrdal set out the principle of cumulation in An American Dilemma (1944), his study of race in the United States: discrimination depressed Black living standards, and the lower living standards were then cited to justify discrimination. In 1957 he extended it to regions and nations, arguing that markets tend to concentrate growth where it has already begun.
In practice
- A town that loses its main employer loses tax revenue, then services, then the residents who can leave, and the decline accelerates.
- A pupil who falls behind in reading avoids reading, and falls further behind.
- Possible explanations
- One explanation is feedback: outcomes become inputs, so an initial gap alters the conditions that produce the next round. Another is migration, since the most mobile leave declining places and take skills and spending with them.
- In its favour
- Consistent with evidence of persistent regional divergence and with Merton's Matthew effect; it shaped development economics and anti-discrimination policy.
- Against it
- Convergence also happens: poorer regions and countries have caught up in many periods, as neoclassical growth theory predicts. The principle says that circles exist without saying when they reverse.
- Standing
- Compare Merton's Matthew effect and the Matthew effect in reading.
- Subject
- Economics & Incentives
- Essay
- The theories behind every argument about money