Poor economies not only produce less; they typically produce things that involve fewer inputs and fewer intermediate steps. Yet the supply chains of poor countries face more frequent disruptions—delivery failures, faulty parts, delays, power outages, theft and government failures—that systematically thwart the production process. To understand how these disruptions affect economic development, we modelled an evolving input–output network in which disruptions spread contagiously among optimizing agents. The key finding was that a poverty trap can emerge: agents adapt to frequent disruptions by producing simpler, less valuable goods, yet disruptions persist. Growing out of poverty requires that agents invest in buffers to disruptions. These buffers rise and then fall as the economy produces more complex goods, a prediction consistent with global patterns of input inventories. Large jumps in economic complexity can backfire. This result suggests why ‘big push’ policies can fail and it underscores the importance of reliability and gradual increases in technological complexity.
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C.D.B. and M.H.B. acknowledge funding from the James S. McDonnell Foundation for the Postdoctoral Award and the Scholar Award (respectively) in Complex Systems. P.P. and F.V.-R. acknowledge funding from the Italian Ministry of Education Progetti di Rilevante Interesse Nazionale grant 2015592CTH. No funders had any role in study design, data collection and analysis, decision to publish or preparation of the manuscript.
The authors declare no competing interests.
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Brummitt, C.D., Huremović, K., Pin, P. et al. Contagious disruptions and complexity traps in economic development. Nat Hum Behav 1, 665–672 (2017). https://doi.org/10.1038/s41562-017-0190-6
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