Abstract
If labour is more abundant and capital is scarcer in developing countries than in developed countries, we might expect to observe the use of more labour-intensive techniques of production in the industrial sector of developing countries, reflecting a lower price of labour relative to capital. Figure 10.1 shows this. Assuming the same production function in the two sets of countries, labelled ‘1’, and holding everything else constant, the lower relative price of labour in the developing country, given by the price line (or isocost curve) cb, gives a more labour-intensive choice of technique than in the developed country, where the relative price of labour is given by the steeper line ad.
This is a preview of subscription content, log in via an institution to check access.
Preview
Unable to display preview. Download preview PDF.
Chapter 10
A. BHALLA (1964) ‘Investment Allocation and Technological Choice — A Case of Cotton Spinning Techniques’, Economic Journal, September.
C. BLISS and N. STERN (1978) ‘Productivity, Wages and Nutrition, Parts I and II’, Journal of Development Economics, vol. 5.
M. DOBB, (1955) ‘A Note on the So-Called Degree of Capital Intensity of Investment in Underdeveloped Countries’ in On Economic Theory and Socialism (London: Routledge & Kegan Paul).
D. FORSYTH and R. SOLOMON (1977) ‘Choice of Technology and Nationality of Ownership in a Developing Country’, Oxford Economic Papers, July.
G. K. HELLEINER (1975) ‘The Role of Multinational Corporations in the Less Developed Countries’ Trade in Technology’, World Development, April.
S. LALL (1978) ‘Transnationals, Domestic Enterprises and Industrial Structures in Host LDCs: A Survey’, Oxford Economic Papers, July.
H. PACK (1974) The Employment—Output Trade-off in LDCs — A Microeconomic Approach’, Oxford Economic Papers, November.
H. PACK (1976) ‘The Substitution of Labour for Capital in Kenyan Manufacture’, Economic Journal, March.
H. PACK (1982) ‘Aggregate Implications of Factor Substitution in Industrial Processes’, Journal of Development Economics, vol. 11.
G. RANIS (1962) ‘Investment Criteria, Productivity and Economic Development: An Empirical Comment’, Quarterly Journal of Economics, May.
J. C. SANDESARA (1966) ‘Scale and Technology in Indian Industry’, Bulletin of the Oxford Institute of Economics and Statistics, August.
A. K. SEN (1968) Choice of Techniques, 3rd edn (Oxford: Basil Blackwell).
A. K. SEN (1969) ‘Choice of Technology: A Critical Survey of a Class of Debates’, in UNIDO, Planning for Advanced Skills and Technology (New York).
A. K. SEN (1975) Employment, Technology and Development (Oxford: Clarendon Press).
F. STEWART (1977) Technology and Underdevelopment (London: Macmillan).
F. STEWART and P. STREETEN (1971) ‘Conflicts Between Output and Employment Objectives in Developing Countries’, Oxford Economic Papers, July.
A. P. THIRLWALL (1974) Inflation, Saving and Growth in Developing Economies (London: Macmillan).
A. P. THIRLWALL (1977) ‘The Shadow Wage when Consumption is Productive’, Bangladesh Development Studies, October—November.
A. P. THIRLWALL (1978) ‘Reconciling the Conflict Between Employment and Saving and Employment and Output in the Choice of Techniques in Developing Countries’, Rivista Internazionale di Scienze Economiche e Commerciali, February.
L. WHITE (1978) ‘The Evidence on Appropriate Factor Proportions for Manufacturing in LDCs: A Survey’, Economic Development and Cultural Change, October.
Author information
Authors and Affiliations
Copyright information
© 1994 A. P. Thirlwall
About this chapter
Cite this chapter
Thirlwall, A.P. (1994). The Choice of Techniques. In: Growth and Development. Palgrave, London. https://doi.org/10.1007/978-1-349-23195-9_10
Download citation
DOI: https://doi.org/10.1007/978-1-349-23195-9_10
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-60087-0
Online ISBN: 978-1-349-23195-9
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)