Explain Rosenstein-Rodan’s view that economic underdevelopment is the outcome of amassive coordination failure.

Paul Rosenstein-Rodan was an economist who proposed a theory about economic underdevelopment, arguing that it is the result of a massive coordination failure. Here's a step-by-step explanation of his view:

1. Rosenstein-Rodan believed that underdeveloped economies are stuck in a low-level equilibrium trap. This means that these economies are trapped in a cycle of low productivity and low income, which prevents them from developing.

2. He argued that the main reason for this trap is a lack of coordination. In other words, the different sectors of the economy are not working together effectively. This could be due to a lack of infrastructure, poor communication, or other barriers that prevent different parts of the economy from coordinating their efforts.

3. According to Rosenstein-Rodan, this lack of coordination leads to a situation where no individual firm or sector has an incentive to invest in increasing their productivity. This is because the benefits of such an investment would depend on similar investments being made across the economy. For example, a factory might not invest in new machinery if the roads are so poor that it can't transport its goods to market.

4. This leads to a situation where the whole economy is stuck in a low-productivity, low-income state. Even if one firm or sector tries to improve, they can't do it alone. The whole economy needs to coordinate its efforts to escape the low-level equilibrium trap.

5. Rosenstein-Rodan argued that the solution to this problem is for a large-scale, coordinated investment in the economy. This could be led by the government or by an external actor like an international development agency. The idea is to kick-start the economy out of its low-level equilibrium trap and onto a path of development.

In summary, Rosenstein-Rodan's view is that economic underdevelopment is the result of a massive coordination failure, where the different parts of the economy are not working together effectively. This leads to a low-level equilibrium trap, where the economy is stuck in a cycle of low productivity and low income. The solution, according to Rosenstein-Rodan, is a large-scale, coordinated investment to kick-start the economy onto a path of development.