ABSTRACT
In the early 1950s when economists first began studying the particular conditions of ‘underdeveloped countries’, as they were then called, it was often suggested that those countries were locked within self-perpetuating vicious circles of poverty. The key question was to determine how growth could be started and then sustained. There were invariably disagreements on this issue within the literature, but many economists agreed that because of the existence of dynamic production complementarities, such as those identified by Perroux, the price mechanism could not allocate resources effectively and therefore there was some need for central planning of the ‘development’ of national economies. A country was generally said to be ‘developing’ when its national economy was growing, and growth was accompanied by structural change. And in addition it was usually assumed that such ‘development’ required industrialization, and that the planning strategy which was most likely to promote ‘development’ was one which gave priority to the establishment and expansion of manufacturing activities.
