chapter  5
15 Pages

UNBALANCED DEVELOPMENT

This chapter is intended to synthesize the sources of inequality examined so far, within a framework of structural and institutional elements interacting throughout the development process within the whole economy, at both regional and sectoral levels. In this way the structural characteristics of two forms of unbalanced development can be identified. First, a case study of a poor country, Sudan, explains how its state-led development process has created and perpetuated inequality between traditional and modern sectors. Then follows an exploration of what has happened in three oil-rich countries (Algeria, Iran and Libya) during and after the oil boom period (1974-80). In both cases the employment and income effects of the movement of working people and public investment between the low and high earnings sectors will be examined. Throughout the chapter I shall address the central question of who benefits, and by how much, from the misallocation of resources.