Theory of Cumulative Causation

Definition

The theory of cumulative causation suggests that once an initial advantage or disadvantage is established in an economic system, it can lead to further advantages or disadvantages over time. These initial advantages or disadvantages can create a cycle that perpetuates itself.

Related terms

Feedback Loop: A situation where the results of an action reinforce that same action in a continuous cycle.

Path Dependency: The idea that past events or decisions shape future developments and limit future choices.

Poverty Trap: A situation where individuals or countries are stuck in poverty due to various interconnected factors such as lack of education, limited access to resources, etc.