Some Analytical Problems in Development Theory

There have been few attempts at formal models of early economic growth. At the same time there has been a great deal of institutional and policy discussion, in which implicit models can sometimes be discerned. In this discussion certain concepts appear with great regularity: the notion of a surplus of labor time which can be mobilized for "modern" economic activities; a presumed behavior of population which leads to a "low-level equilibrium trap"; the need for a "big push" to break out of this trap; indivisibilities and externalities which produce a necessary lumpiness of investment and a divergence between social and private returns; debate over "balanced" versus "unbalanced"growth of production; discussion of the optimal savings rate for a national economy; and possible ways of adjusting to the initially very skewed factor endowment of most LDC's.