ABSTRACT
Within twenty years of the end of the Second World War two noted authors, from distinctly different ideological perspectives, emphasised the significance of savings and capital investment for economic growth (Lewis, 1954: 155 and 1955: Chapter V; Rostow, 1960a: 37 and 1960b: Chapter XII). Arthur Lewis, a Nobel Laureate in Economics in 1979, was born in the West Indies, but spent much of his academic career in the United Kingdom at the University of Manchester. He was the author of several very significant books and articles which had a profound influence on economic development policy just before, and for some years after, the independence of many former British colonies, particularly in sub-Saharan Africa. Walt Rostow, a noted economic historian, introduced the concept of ‘stages of economic growth’ (including the take-off into sustained economic growth) which reverberated around the development studies community, and provided a readily understandable strategic approach for politicians. One of the objectives of this chapter will be to explain in more detail why economists consider savings and capital investment to be so important for economic growth.
