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Critical minimum effort thesis

critical minimum effort thesis

or the initial series of efforts must be above a certain minimum magnitude. Among those, more important are: "Western Market Incentives" implying a strong profit incentive, A willingness to accept entrepreneurial risks, and. It is, therefore, not definite that decline in birth rate, population would start decreasing as per capita income increases. The above factors make it necessary that some minimum level of investment is undertaken in an economy to make it possible for the growth promoting forces to set. Leibenstein identified population also an income-depressing factor (or a whereas investment is an income-generating factor. Also, if per capita income is not raised at once above a certain level, certain income depressing forces will be set in operation during the process of development, and these forces will in the end outrun the income-raising forces and bring per capita income back. This circle is believed to be so vicious and deep rooted that no small effort can be expected to break. If the growth rate of national income is higher than 3 per cent, there is no guarantee of endless expansion or sustained economic growth. Like Rostows take-off-stage, this thesis seems to be more practical for underdeveloped economies. The path of sustained growth is not even and smooth. These forces have more deeper impact on the development and these factors are considered an integral part of development. In order to overcome these influences which keep an economy in backwardness, a sufficiently large critical minimum effort is required to sustain a rapid rate of economic growth.

The theory is more realistic that Rosenstein-Rodan's "big push" theory because critical minimum effort can be broken up into a series of smaller efforts which can be properly times to put the economy on the path of sustained growth. There is a sort of mutuality and interdependence between a number of firms and industries. But still, this thesis suffers from a number of weaknesses. But this decrease is not due to increase in the per capita income. Thus, it is a very dubious hypothesis. He discusses a level biology essay help that underdeveloped countries are characterized by vicious circle of poverty which keeps them around a low income per capita equilibrium state. The population declines beyond a certain level of investment. The initial infection of investment might be enough to raise per capita income. An eagerness to promote scientific and technical process.

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