A model is developed that shows how two sectors or regions interact out of steady state through product, labor, and capital markets, and how if the former. Balanced and Unbalanced Growth A mechanism of endogenous growth suitable for investigation of sectoral or regional interaction download in pdf format. Having critically examined the comparative analysis of balanced and unbalanced growth strategies, a logical question arises: which of these two strategies.
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The question as to which economic sectors can play a leading role in a development process has given rise to two schools of thought. The author presents a. Development Strategy. Balanced Versus Unbalanced Growth by Dr Wilfred A. Ndongko, Yaounde*. The question as to which economic sectors can play a. Balanced Versus Unbalanced Growth - Download as PDF File .pdf), Text File . txt) or read online. bu vs ubu.
Some of the debate was semantic, as the meaning of balance can vary from the abrupt requirement that all sectors grow simultaneously and at the same rate to the more simple plea that same attention be given to all major sectors—industry, agriculture and services. In contrast, A. Hirschman develops the idea of unbalanced investment to complement existing imbalances. So the best way to stimulate development in LDCs is to deliberately create an imbalance. The issue is yet to be resolved.
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International Finance and Macroeconomics. Productivity, Innovation, and Entrepreneurship. Special Projects: Retirement and Disability Research Center. The Science of Science Funding Initiative. Rosenstein-Rodan uses an example of a closed economy to illustrate this indivisibility. He assumes that there are numerous subsistence agricultural workers whose marginal product of labor is zero i.
If of these workers are hired in a shoe factory, their wages would increase income. However, they will not spend all of their additional income this way. Indilziiibilz'gi in the of raving: High minimum amount of investment requires a high volume of savings. Criticisms of balanced growth 1. It is too costly. Application of balanced growth requires huge amounts of precisely those abilities which are of ' limited supply in LDCs. Not enough investment funds.
Not enough skilled managers, accountants, etc. Assumes superior role of manufactunng to primary products. LDCs cannot ignore agriculture if they are to feed their population, supply industrial inputs, and earn foreign exchange.
Neglects conditions under which investments once made can be fruitful i. Ignores the possibility of linkages. This point is raised by Hirschman in his theory of unbalanced growth. Places too much emphasis on import substitution 6. Infrastructure social overhead capital is not as indivisible as Rosenstein-Rodan implies.