ABSTRACT
Economists recognise that an investment of the order of 12–15 per cent of the net national income is necessary if it is intended to diversify and advance a backward economy by the development of secondary and tertiary opportunities. The rate of return on such a degree of investment exceeds typical rates of population growth and permits of rising standards and cumulative returns. The maintenance of such a rate of investment allows the economy to move into the ‘take-off’ stage: the small snowball begins to roll. This is an oversimplification in that capital alone does not automatically engineer development, for much depends on the qualities of the people: their ability and desire to learn and apply better methods of production, their enterprise, the removal of institutional obstructions and the provision of incentive to effort and investment. However, capital is a very necessary ingredient and the real nub of the matter lies in overcoming the complex problems standing in the way of attaining or bettering the 12 per cent-plus level. It is this ordering of economic progress by means of formulae, equations and interlocking of planning measures that is typical of the mid-twentieth-century attack upon the problem of under-development. One reason for the necessity of the planned approach stems from the wide differences between the present developed lands in their early stages of growth and the present under-developed lands.
