ABSTRACT
Among Arthur Lewis’s varied contributions to the theory of economic development and the practice of development policy, one of the earliest was his book on The Principles of Economic Planning, published in 1950 prior to his justly celebrated paper on ‘Economic development with unlimited supplies of labour’. He returned to this theme sixteen years later in his book Development Planning. Another important strand of his work is his historical as well as theoretical studies of foreign trade. In his work on planning and on the theory of economic growth he drew attention to the possible divergence between market prices and social (or shadow) prices of goods and factors. This chapter is devoted to a survey of recent contributions to a field in which the many areas of Lewis’s interest, namely, development planning, development practice, foreign trade theory and policy, as well as the derivation and use of shadow prices, appear to converge. This field is social cost–benefit analysis, or more narrowly, project evaluation or appraisal.
