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Definition o f Development Economics by Michael P. Todaro

To define development economics, as Michael P. Todaro defined it, that it is the efficient allocation of existing scarce productive resources. By this definition we can assume that it furnishes the assumption of a country succeeding to allocate its present resources efficiently would therefore start to develop; meaning that all other factors in the country would start to develop such as education, poverty levels decline, equal distribution of incomes...etc.. For a country to develop economically, allocate its resources, it should go on developing either agriculturally or industrially. In the 1950's, after Egypt turned to be a republic, there was the great development researches of Sir W. Arthur Lewis, the eminent English Economist, many economists suggested, as a world theory of development, to disregard agricultural development and directly move into industry. Assuming that if we concentrate on industry the agriculture sector would develop on its own, they called it the Lewis two-sector model. In the 1960's, Egypt adopted this policy and it failed to develop, while in India, which was similar in the economic status to Egypt, they disregarded this theory and succeeded in starting to develop rapidly by paying full attention to developing both wisely.

The Lewis theory of development stated that the more I industrialize the more my per capita income would increase and the higher the growth rate of my economy. Assuming that if I shift to industrial development the above mentioned consequences would cause the shift or increase in agriculture development; therefore, my whole economy would grow or develop. Lewis assumed a few assumptions with this theory: first, is that I would have an unlimited supply of labor, where he assumed that there will always be disguised unemployment in the agriculture firm, land. Accordingly, we can take this extra labor supply and hire in industry. This assumption was based on the theory that most farms have a...

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Definition o f Development Economics by Michael P. Todaro. (1969, December 31). In DirectEssays.com. Retrieved 10:20, July 28, 2014, from http://www.directessays.com/viewpaper/76910.html