Arthur Lewis' Contribution to Development Thinking and Policy

Abstract

Arthur Lewis' seminal 1954 paper and its emphasis on dualism appeared at a time when neither the work of Keynes or Harrod-Domar nor the later neoclassical production function of Solow seemed relevant for developing countries. As a consequence, his model, rooted in the classical tradition, plus its many extensions, generated an extensive literature at the center of development theory. The approach also encountered increasingly strong criticism, some of the "red herring" variety, but some, spearheaded by neoclassical microeconomists like Rosenzweig, also raised serious challenges, focused especially on its labor market assumptions. This paper reviews this landscape and asks what theoretical or policy relevance the Lewis model retains for today's developing countries.Development Theory, Dualism, Labor Markets