Q. Which one of the following best describes the “Lewis Model of Economic Development”?

[A] It focuses on the role of internal factors, such as human capital, research and development, and innovation, in driving economic growth.

[B] It believes that economic growth occurs when surplus labor from the agricultural sector moves to the industrial sector, leading to increased productivity and wages

[C] It emphasizes the need for structural changes in the global economy to promote development in less developed countries.

[D] It stresses the importance of good governance, strong institutions, and the rule of law in fostering economic development.

Answer: B
Notes:

Explanation – The Lewis Model, developed by Sir W. Arthur Lewis, is an economic theory that explains the process of economic development in dualistic economies, where there is a coexistence of two sectors: a traditional agricultural sector and a modern industrial sector.

This model posits that economic development occurs as surplus labor from the agricultural sector is gradually absorbed into the industrial sector, resulting in increased productivity, higher wages, and overall economic growth.

It emphasizes the importance of labor mobility and the transition from low-productivity agricultural activities to higher-productivity industrial activities as key drivers of economic development in such economies.

Source: ForumIAS

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