Lewis Model

In conclusion, the main assumption of the Lewis mode unveils the availability of extra labor in the rural areas, which promises infinite elastic labor provision in the industry to the time the surplus labor is exhausted and a tendency. If the assumption in Lewis’s model cannot be considered feasible, therefore, it would be tolerable to assume that the unavailability of surplus labor in rural areas would imply. Exploring deeper in to this case, an assumption could be draw that if industrialists reinvest their benefits, there would be no assurance that their surplus might rise significantly. A reduced marginal predisposition to make saves by industrialists would impose a break in the labor transfer procedures.

The South Korea government attempted to pursue some appealing and specified policies. Those policies supposed that the dependence schools could applaud, which included executing an exceptionally active industrial improvement policy, strictly limiting the responsibility of multinational corporations and intentionally establishing new native industries as a substitute, and by debt instead of direct international equity investment to fund unusual heights of investment. The government also instituted among the most determined land restructuring programs in the growing world and put emphasis on the primary relatively than university education. These two policies were truly essential. The South Korean Government also holds a rigid defiance to the neoclassical counter-revolution structures. South Korea was extremely interventionist locally and in the international trade market. The government made extensive utilization of development scheduling through broad levels of incentives, and tax breaks to persuade firms to adhere and support the government’s interventions and directives.

In another case, Argentina offers a number of exoneration for reliance theories given that the country depended largely on exports of primary goods. Compared to imports, the actual prices of these products were cut down. Argentina’s stipulated development became a casualty of the developed country’s economic welfare, those of American and British corporations. Fascinatingly, Argentina presently provides a number of justifications for neoclassical counter-revolution assumption in that imperfect interventionist regulations, ineffective state projects, predisposition against production of exports, and superfluous red tape eventually hurt entrepreneurship and industries.

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