Th4.3: OS - Industrialisation Flashcards
What does the Lewis model assume?
that developing countries had dual economies with a traditional agricultural sector, which had low wages, low productivity, underemployment and low savings and a modern industrial sector with high levels of investment and urbanisation
What is suggested would happen through offering who higher wages?
the modern industrial sector would attract workers from rural areas by offering higher wages
Lewis believed that labour productivity was so low in the agricultural areas that…
people leaving the area would have no impact on output and would in fact mean there was a surplus of food, since the same amount was being shared amongst fewer people
Those who moved to the urban areas would have…
have higher incomes and thus more savings for investment
What did he believe was the key to growth?
savings and investment, and thus growth could be achieved through rural-to-urban migration
What are some flaws with Lewis’ theory?
although labour productivity is low sometimes, during planting and harvesting vast amounts of labour is needed
it is also not necessarily true that those with higher wages will save and invest their money
Recently, what has migration led to?
urban poverty, replacing rural poverty as industrial sector is unable to provide jobs for all those who have moved
What will lead to a reduced demand for labour?
improvements in technology
It can be argued that industrialisation is…
a result of development, not a cause
How can the government encourage industrialisation?
build factories and plants
What country undermined this theory and proved?
India as they went to agricultural services as they had a comparative advantage, proving not all countries with develop the same way
