ABSTRACT
COUNTRIES Industrialization has been regarded as a major strategy for achieving a faster rate of economic growth and a higher standard of living in many LDCs. Several reasons are advanced to justify such a strategy. First, it is contended that economically advanced countries are usually more industrialized than the economically poor countries. The strength of this argument is derived from the lessons of economic history of developed countries. Second, industrialization is sometimes regarded as the major way to solve the problem of unemployment and under-employment in LDCs, many of which suffer from problems of a highly adverse man-land ratio. Third, the nature of trade of many LDCs prompts them to choose industrialization as an avenue to solve the problem of instabilities in the earnings from exports which chiefly consist of primary products. The demand for primary products in the international market is usually price and income inelastic. The LDCs also suffer from a chronic balance of payments deficit. Fourth, it is argued that industrialization alone can alter the present economic and social structure of many LDCs which is not conducive to achieving a higher level of economic development since dynamic externalities1 concomitant with industrialization are necessary conditions for attaining a high level of growth. Some of the advocates of the ‘big-push’ theory have actually emphasized the need for industrialization on the strength of dynamic externalities. Fifth, given the low level of productivity in most LDCs, particularly in agriculture, industrialization is supposed to improve productivity by increasing efficiency. Sixth, the desire to attain selfsufficiency has prompted many LDCs to choose the path of industrialization. Finally, industrialization is regarded as an important policy to affect fundamental economic and social changes in LDCs which are considered as necessary conditions to raise their growth potentials.
