A theory for national industrial development presented in a system dynamics model

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1985
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Virginia Polytechnic Institute and State University
Abstract

The dissertation presents a system dynamics model for national industrial development in developing economies. A development system is defined by national boundary, components and activities. The system is represented by ten activity sectors grouped into three functional classes: (1) Two driving sectors comprising population and investment capital sectors; (2) Seven industrial sectors: resources, manufacturing, agriculture, physical infrastructure, services, technology, and social infrastructure; and (3) An outlet sector represented by a trade sector.

The model's general theory of industrial development dynamics is described by causal feedback loops. A causal feedback loop consists of two or more interrelated variables where a change in one of the loop's variables causes all others to change as well. The industrial development model's specific structure evolved by applying the causal feedback theory to the system activity sectors. The model is written in DYNAMO, a continuous system, computer simulation language.

A prototype model run illustrated the basic development process and possible effects of alternative policies. Several conclusions were drawn regarding sensitive system parameters and various development policies. In addition, three developing-country examples representing low, middle, and high income groups were evaluated. Recommendations about model use and system analysis were presented. The industrial development model is intended to aid during development analysis and planning phases.

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