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Balanced Development Theories - Common overview Theory of Development

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There are two basic ways of development - Balanced Development Theory and Unbalanced Growth Theory


Let's talk about the Balanced Growth Theory 

The Balanced growth theory emphasizes the idea to invest proportionately in all sectors of development so that the goal of holistic development is achieved.


There are some theories supporting the balanced growth theory.

P L Samuelson says - Balanced growth implies growth in every wind of capital stock at constant rates 

Benjamin Higgs says - A wave of capital investment in several industries is called Balanced Growth.

W.A. Lewis says - In the development plan, all sectors of the economy should grow simultaneously to balance between industry and agriculture and between the production of home consumption and

production for export. 


Rosanstein, Ranger Nurkse  and W A Lewis Theory


Broadly different type of strategies adopted in applying balanced growth theory is as follow - 

1. Balanced growth in Agriculture and Industry - 

Lewis has explained that " If agriculture stagnates, 

the capitalist sector can not grow, 

capitalist profit remains a small part of national income, 

saving and investment are correspondingly small, 

hence economic development can not happen until

or unless the industry and agriculture sectors grow together. 


2. Balance between domestic and Foreign Trade -

 Balanced growth theorists explain that the balance between domestic consumption and export should 

exist so that the economy grows in a balanced manner. Meir and Baldwin have strengthened the aforesaid statement in their theories.



3. Balance between demand and supply factors - 

This is a major issue in underdeveloped countries where there is enough manpower but production, and consumption imbalance exists that's why unemployment and underemployment exist and that's why the demand and supply system breaks. Primary sectors have abundant manpower whereas production in the economy is respectively very less in a system in underdeveloped or developing countries. 


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