The concept of absorptive capacity: Origins, content and practical relevance

Abstract

Ever since the end of the Second World War there have been regular calls for a comprehensive and extensive “Marshall Plan” for Third World countries. One of the most popular lines of counter-argument is that developing countries do not even possess the necessary absorptive capacity to make effective use of larger international transfers of purchasing power. On the strength of this “Low Absorptive Capacity Thesis”, as S.P. Schatz called it in 1961¹, a politically unpleasant prlblem, yet one which represents a question of principle in development policy, has for years been dismissed or passed on to the fundamental planning departments of development aid institutions and to the representatives of science and research. What exactly lies behind this problem?