ABSTRACT
T. J. Byres's critique of the urban bias thesis, which he developed more than two decades ago, can be usefully discussed under three interrelated themes. First and foremost was his challenge to the political economy foundations of the thesis. The second dimension of Byres's critique of the urban bias thesis related to the definitions and factual evidence on the different mechanisms of intersectoral resource transfer as put forward by the proponents of the thesis, most notably by Lipton. This chapter discusses some of the more recent literature on urban bias, and it examines empirical work in this field based on methodologies derived from conventional neoclassical theory. The first concerns the existence of dynamic economies or externalities associated with industrialisation, that is, dynamic and static economies of scale in modem manufacturing as well as the special role of manufacturing in inducing technological progress in other sectors. The urban bias hypothesis in this context translates into the agricultural squeeze hypothesis.
