Capital Accumulation in Economic Development

Abstract

Reviews theoretical justifications and economic consequences of a development strategy adopted, commonly by newly independent developing countries in a few decades after the Second World War, that advocated maximizing capital accumulation in the industrial sector by means of government planning and command. The general failure of this strategy, which had become evident by the 1980s, produced a conviction that accumulated capital cannot be an effective basis for economic development unless it is combined with appropriate technology and manpower under appropriate institutions.