Like rostows takeoffstage, this thesis seems to be more practical for underdeveloped economies. This minimum level of investment is called critical minimum effort. It is necessary for the sustained economic growth of underdeveloped countries that a certain minimum sum of money is invested. According to nelson, the disease can be diagnosed as retarded the countrys. Assess the relevance of leibensteins critical minimum effort thesis to the problems of developing countries. According to leibenstein, a sufficiently large minimum effort is necessary at the outset if the necessary minimum is to be achieved. Critical minimum effort theory planning theory urban. Leibensteins critical minimum effort theory weaknesses. Harvey leibenstein, economnic backwardness and economic growth.
The critical minimum effort can be properly timed and. The concepts of xinefficiency were introduced by harvey leibenstein the degree of efficiency maintained by individuals and firms under. The critical minimum effort theory was propounded by prof. Harvey leibenstein in his book economic backwardness and economic growth. Again, critical minimum effort has got the merit of being consistent with the idea of democratic planning which the majority of backward and underdeveloped economies are wedded. It provides a programme of massive industrialization. The critical minimum effort can be properly timed and divided into smaller efforts to put the economy on the path of sustained growth. Even if environment was strongly embedded in polmans strategy, and sustainability combined with marketing, the plan has two shortfalls. One of his most important contributions to economics was the concept of xefficiency and the critical minimum effort thesis in development economics. This passage is an overview of the theory of the entrepreneur, according to harvey leibenstein of harvard university written by leibenstein himself.
Leibensteins critical minimum effort thesis proposal. Xinefficiency is the difference between efficient behavior of firms assumed or implied by economic theory and their observed behavior in practice. In todays lecture we will discuss about the big push theory and the critical minimum effort thesis as put forward by professor harvey leibenstein. Leibensteins thesis is based upon this empirical evidence that the rate of population growth is a function of level of per capita income. Harvey leibenstein 1922 february 28, 1994 was a ukrainianborn american jewish economist. Leibenstein critical minimum effort thesis nelson low level equilibrium trop. Leibensteins critical minimum efforttheory of under. It occurs when technicalefficiency is not being achieved due to a lack of competitive pressure. The way out of this impasse is a certain critical minimum effort which would raise the per capita to a level at which sustained. Critical minimum effort theory planning theory urban planning.
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