The backwardness model is a theory of economic growth created by Alexander Gerschenkron. The model postulates that the more backward an economy is at the outset of economic development, the more likely certain conditions are to occur.
The more backward the economy:
The more likely intervention by special institutions will be necessary to properly channel physical capital and human capital to industries. Special institutions include banks, as in the moderately-backward Germany, or the state, as in the severely-backward Russia.
The greater the emphasis on the production of producer goods than consumer goods.
The greater the emphasis on capital-intensive production rather than labor-intensive production.
The greater the scale of production and enterprise.
The greater the reliance on borrowed rather than indigenous technologies.
The smaller the role of the agricultural sector as a market for new industries.
The greater the reliance on productivity growth.
Gerschenkron adamantly refused to define how backwardness could be measured, but alluded to its existence along a northwest-to-southeast axis in Europe during its history, with the United Kingdom at one extreme, being the least backward country at the outset of its economic development, and the Balkan countries and Germany lying somewhere between the two.
The backwardness model is often contrasted with the Rostovian take_off model developed by W.W. Rostow, which presents a more linear and structuralist model of economic growth, planning it out in defined stages. The two models are not mutually exclusive, however, and many countries appear to follow both models rather adequately.
Backwardation is the reverse, where the cost of a commodity in the more distant future is less than it is in the near future.
Backwardation, the reverse of contango, is indicative of supply shortages in today's spot market because if there is ANY spare capacity for production it would be used to take advantage of today's higher prices, resulting in those prices declining.
And backwardation can be a self-perpetuating event for a time, so it's no surprise that it proceeds for a while before correcting back to a contango pattern.
Backwardation, sometimes incorrectly referred to as "backwardization," is the situation where futures contracts closer to expiration trade at higher prices than those that are far from expiration.
Backwardation is an abnormal situation, and is suggestive of supply insufficiencies in the corresponding (physical) spot market.
The LME uses backwardation limits in emergency situations, such as in 2005 following Hurricane Katrina when Zinc warrants in New Orleans were suspended until the warehouses were checked, or to act against possible or suspected market manipulation, such tightness in particular prompts for Aluminium in early 1999.