Lewis, W. A. (1977) The Evolution of the International Economic Order, Princeton, NJ: Princeton University Press.

• the dependence of an industrial revolution on a prior or simultaneous agricultural revolution. 9
• In a closed economy, the size of the industrial sector is a function of agricultural productivity. 9
• The distinguishing feature of the industrial revolution at the end of the eighteenth century is that it began in the country with the highest agricultural productivity - Great Britain - which therefore already had a large industrial sector. 10

Samuelson, P. Economics: An Introductory Analysis, 7th ed., New York: McGraw Hill.

• Perfect competition is defined by the economist as a technical term: "perfect competition" exists only in the case where no farmer, businessman, or laborer is a big enough part of the total market to have any personal influence on market price; on the other hand, when his grain, merchandise or labor, is large enough in size to produce depressing or elevating effects on market prices, some degree of monopolistic imperfection has set in, and the virtues of the Invisible Hand must be that much discounted. 41
• Capital goods, then, represent produced goods that can be used as factor inputs for further production, whereas labor and land are primary factor inputs not usefully thought of as being themselves produced by the economic system. 48

Viner, J. International Trade and Economic Development: Lectures Delivered at the National University of Brazil, Glencoe, IL: The Free Press.

• As long as a country has a comparative advantage in the expansion of agriculture over the expansion of manufacturing in the investment in their own estates of their savings by rural landowners may be the most productive and the most efficient investment under way in the national economy. 135
• If a government draws off from its citizens in taxes a part of what they otherwise would have spent for current consumption, and uses the proceeds in useful public works, the government is performing the saving function for the community. 137
• foreign capital, in the absence of major changes in the international scene, will make but a marginal contribution to the capital needs of most underdeveloped countries. This renders all the more urgent the fostering of such internal conditions by these countries as will encourage domestic saving and the prudent use of the proceeds in the development of productive facilities, material and human. 140
• The greater the increase in a country's population, other things equal, the greater will tend to be the volume of its staple export products which it will attempt to market abroad, provided these are not also staple articles of domestic consumption, and therefore the worse will its terms of trade be. 142
• Primary commodities generally have a wider amplitude of fluctuation in their prices during the business cycle than do manufactured commodities. Countries exporting primary commodities are consequently squeezed during a depression by a greater drop in their export than in their import prices. ... During booms, primary products rise more in price than do manufactures. 142
• for a country dependent to an important extent on exports of manufactures to finance its essential imports, any lag in technological progress can be fatal, this not true to anything like the same degree, if true at all, for a country which exports mainly primary products. 145
• as per capita income rises the proportion of the income spent on primary products shrinks, so that there results, with rising per incomes, a relative trend of demand unfavorable to agriculture. ... But the relative decline in demand for agricultural products will not be a positive decline. It therefore will not prevent but will only lessen the rate of progress in per capita agricultural incomes if agriculture does not increase disproportionately... 145

Rostow, W. (1960) The Stages of Economic Growth: A Non-Communist Manifesto, Cambridge: Cambridge University Press.

• in terms of human motivation, many of the most profound economic changes are viewed as the consequence of the non-economic human motives and aspiration. 2
• The idea spreads that not merely economic progress is possible, but that economic progress is a necessary condition for some other purpose, judged to be good: be it national dignity, private profit, the general welfare, or a better life for the children. 6
• The revolutionary changes in agricultural productivity are an essential condition for successful take-off; for modernization of a society increases radically its bill for agricultural products. 8

Singer, H., and Ansari, J. (1988) Rich and Poor Countries: Consequences of International Disorder, 4^th ed., London: Unwin Hyman.

• A slowing-down of growth and rising unemployment combined with speeded-up inflation expressed itself in a major recession in the industrialized countries. 'Stagflation' was an entirely new experience because the foundation of the Bretton Woods system was a trade-off between unemployment and inflation. 10

Myrdal, G. (1968) Asian Drama: An Inquiry Into the Poverty of Nations, New York: The Twentieth Century Fund.

• The bests interests of the United States, for instance, dictate the establishment and growth in the underdeveloped countries of what many people there themselves strive for: a stable and, where possible, democratic regime in a consolidated nation capable of economic development. 13
• Economic theorists, more than other social scientists, have long been disposed to arrive at general propositions and then postulate them as valid for every time, place, and culture. 16
• Economists operate to a great extent within a framework that developed early in close relationship with the Western philosophies of natural law and utilitarianism and the rationalistic psychology of hedonism. Only with time has this tradition been adapted to changing conditions, and then without much feeling of need for radical modifications. 17
• When we economists, working within this tenacious but variegated but flexible tradition of preconceptions that admittedly are not too badly fitted to our own conditions, suddenly turn our attention to countries with radically different conditions, the risk of fundamental error is exceedingly great. 17
• The lack of mobility and the imperfection of markets in underdeveloped countries rob the analytical method of aggregation of magnitudes - employment, savings, investment, and output - of much of its meaning. This conceptual difficulty is in addition to the statistical one already pointed out: that the data aggregated are frail and imperfect, partly because their categories are unrealistic. 19
• while in the Western world an analysis in "economic" terms - markets and prices, employment and unemployment, consumption and savings, investment and output - that abstracts from modes and levels of living and from attitudes, institutions and cultures may make sense and lead to valid inferences, an analogous procedure plainly does not in underdeveloped countries. 19-20
• the tendency to use the familiar theories and concepts that have been used successfully in the analysis of Western countries exerts influences in the same direction. 23
• The strict logic a non-theoretical approach is scientific work is impossible; and every theory contains the seed of a priori thought. 24
• Theory, therefore, must not only be subjected to immanent criticism for logical consistency but must be constantly measured against reality and adjusted accordingly. 24
• Theory is thus no more than a correlated set of questions to the social reality under study. 25
• Inherent in all honest research is a self-correcting, purifying force that in the end will affirm itself. 25
• we need not only establish the mechanisms that can explain the unique properties of these economies but also to build an analytical structure fitted in the dynamic problems of development and planning for development. 27
• [objective research] The student should have no ulterior motives. He should confine himself to the search for truth and be as free as possible from both he pressures of tradition and of society around him and his own desires. More particularly, he should in his research have no intention in influencing the political attitudes of his readers, either inside or outside the countries whose conditions he is studying. His task is to provide factual information that will help them all reach greater rationality in following out their own interests and ideals, whatever those are. In his scientific work he should have no loyalties to any particular country or group of countries or any particular political ideology, whatever his own preferences. Indeed, he should have no loyalties at all except to the professional standards of truth-seeking. 31
• The only way in which we can strive for objectivity in theoretical analysis is to lift up the valuations into the full light, make them conscious and explicit, and permit them to determine the viewpoints, the approaches, and the concepts used. In the practical phases of a study the stated value premises should then, together with the data - established by theoretical analysis with the utilization of those same value premises - form the premises for all policy conclusions. 33

Schumpeter, J.A. (1961) The Theory of Economic Development, New York: Oxford University Press.

• The mere knowledge of the changed state of affairs is not attained in most cases with desirable promptness. To draw conclusions from the knowledge is again a big step, which meets many obstacles in unpreparedness, the lack of means and so on. 33
• This stability is indispensable for the economic conduct of individuals. 40
• There is one kind of economic conduct which, under given conditions, establishes the equilibrium between means on hand and wants to be satisfied in the best way possible. 40
• For the economic state of a people does not emerge simply from the preceding economic conditions, but only from the preceding total situation. 58
• Every concrete process of development finally rests upon preceding development. 64
• Development in our sense is a distinct phenomena, entirely foreign to what may be observed in the circular flow or in the tendency towards equilibrium. It is a spontaneous and discontinuous change in the channels of the flow, disturbance of equilibrium, which forever alters and displaces the equilibrium state previously existing. 64
• To produce means to combine materials and forces within our reach. To produce other things, or the same things by a different method, means to combine these materials and forces differently. 65 Development in our sense is then defined by the carrying out of new combinations. 66
• command over means of production is necessary to the carrying out of new combinations. 68
• Here the success of everything depends upon intuition, the capacity of seeing things in a way which afterwards proves to be true, even though it cannot be established at the moment, and of grasping the essential fact, discarding the unessential, even though one can give no account of the principles by which this is done. 85

Schumacher, E. (1973) Small Is Beautiful: A Study of Economics as if People Mattered, London: Abacus.

• Small-scale operations, no matter how numerous, are always less likely to be harmful to the natural environment than large-scale ones, simply because their individual force is small in relation to the recuperative forces of nature. 29
• [Dorothy Sayers] "War is a judgment that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe ... Never think that wars are irrational catastrophes: they happen when wrong ways of thinking and living bring about intolerable situations." Creed or Chaos, Methuen and Co, London, 1947. 30
• An entirely new system of thought is needed, a system based on attention to people, and not primarily attention to goods. It could be summed up in the phrase - 'production by the masses, rather than mass production'. 61
• that the key factor of all economic development comes out of the mind of men. 64
• Marx does not say that some parts of history are made up of class struggles; no, 'scientific materialism', not very scientifically, extends this partial observation to nothing less than the whole of 'the history of all hitherto existing society'. 73
• Every country, no matter how devastated, which had a high level of education, organization, and discipline, produced an 'economic miracle'. 140
• Education does not 'jump'; it is a gradual process of great subtlety. Organization does not 'jump'; it must gradually evolve to fit changing circumstances. And much the same goes for discipline. All three must evolve step by step, and the foremost task of this development policy is to speed this evolution. 140-1
• If new economic activities are introduced which depend on special education, and special organization, and special discipline, such as are in no way inherent to the recipient society, the activity will not promote healthy development but will more likely to hinder it. 141
• The task, then, is to bring into existence millions of new work-places in the rural areas and small towns. ... The real task may be formulated in four propositions. First, that workplaces have to be created in the areas where people are living now, and not primarily on metropolitan areas into which they tend to migrate. Second, that these workplaces must be, on average, cheap enough so that they can be created in large numbers without this calling for an unattainable level of capital formation and imports. Third, that the production methods employed must be relatively simple, so that the demands for high skills are minimized, not only in the production process itself but also in matters of organization, raw material supply, financing, marketing, and so forth. Fourth, that production should be mainly from local materials and mainly for local use. These four requirements can be met only if there is a 'regional' approach to development and, second, if there is a conscious effort to develop and apply what might be called an 'intermediate technology'. 146-147
• Economic development is something much wider and deeper than economics, let alone econometrics. Its roots lie outside the economic sphere, in education, organization, discipline and beyond that, in political independence and national consciousness of self-reliance. 171
• Economic development is primarily a question of getting more work done. For this, there are four essential conditions. First, there must be motivation; second, there must be some know-how; third, there must be some capital; and fourth, there must be an outlet: additional output requires additional markets. 172
• Planners...proceed on the assumption that the future is not 'already here', that they are dealing with a predetermined - and therefore predictable - system, that they can determine things by there own free will, and that there pans will make the future different from what it would have been had there been no plan. 188
• The best formulation of the necessary interplay of theory and practice, that I know of, comes from Mao Tse-tung: Go to the practical people, he says, and learn from them: then synthesize their experience into principles and theories; and then return to the practical people and call upon them to put these principles and methods into practice so as to solve their problems and achieve freedom and happiness. Selected Works by MTT, V.III.

Killick, T. (ed.) (1995) The Flexible Economy: Causes and Consequences of the Adaptability of National Economies, London: Routledge.
"Relevance, meaning and determinants of flexibility," T. Killick, pp. 1-33

• An economy with a flexible structure, which can readily adjust with the needs of the time, will achieve faster development than an economy with rigid structure. Inflexible economies can expect retarded growth, with disjunctures between demand and supply creating bottlenecks, balance-of-payments strains, inflationary pressures and other economic dislocations. 1
• The flexibility of national economies is a distinctive concept, worthy of separate study, which is not adequately treated in the present literature on market efficiency and long-run development. 1
• Responsive flexibility refers to the reaction of economic agents to altered relative prices or other economic stimuli. By contrast, innovatory flexibility refers to changes initiated by the exercise of entrepreneurship. 8 It may involve the creation of new, or substantially altered , institutions - generally a protracted process. 9
• institutions, and their adaptability, mattered most in explaining the differential rates of diffusion of economic growth. 10
• A flexible economy requires a population that is willing to take action to maximize whatever material benefits may be derived from changing conditions (or to minimize the costs). This points in favor of an individualistic (or family-based) welfare maximizing approach, and mobility in pursuit of this objective, since collective action is apt both to be slower and more uncertain. 10
• By reducing risks and losses of equity, and by offering a financial reward, it tends to increase total saving. It thus also promotes capital formation, by increasing the supply of investible resources. It thus also promotes capital formation, by increasing the supply of investible resources. Savings are transferred to investors with different needs, degrees of risks and prospective rates of return, thereby permitting more diversified and efficient investment. 14
• a society with a vigorous entrepreneurial culture is likely to have a flexible economy. 16
• Product and process changes are self-evidently among the most important forms of innovatory flexibility. 16
• we can define a flexible economy as one which individuals, organizations and institutions efficiently adjust their goals and resources to changing constraints and opportunities. 18

"Flexibility and long-term economic development", M. Syrquin, 34-63

• Flexibility and adaptability appear to be key elements in facilitating the all encompassing transformation required by modern economic growth, particularly in view of the conflictual nature of the process. 34
• The level of flexibility of an economy can be said to depend on (a) informational and incentive systems and (b) factors bearing on the responsiveness of economic agents to those systems. The first category refers to factors affecting the opportunity sets of economic agents, while the second focuses on the agents' reactions. 35
• More generally, [flexibility] is the ability to create new opportunities in addition to recognizing and exploiting available ones. 36
• To enhance flexibility, we need inducement mechanisms that can help mobilize the underutilized resources. 40
• The concept of flexibility is particularly relevant in disequilibrium situations, but mainstream economics is not as developed in dealing w/ such situations as its is for the analysis of equilibrium.42
• A central component for the acquisition of human capital is 'the value of the ability to deal with disequilibria'. Education is shown to influence positively the ability to cope with change. 42
• As the level of income goes up we can expect flexibility to increase as a result of the following development-related changes: an improvement in the systems generating and disseminating information, a rise in the levels of education and skills in the labor force, a change in the attitudes of the population leading to a higher mobility and responsiveness in general, and a greater commitment to growth of the part of the government. 50
• The main conclusion...is that flexibility can probably be enhanced by very prosaic methods. Foremost is education and more generally, the development of human capabilities, which ultimately determine the capacity to adapt and to transform. 59

"Adapting the economies of Eastern Europe: Behavioral and institutional aspects of flexibility," A. Neuber, pp. 111-153

• "Institutions are the constraints that human beings impose upon themselves to structure human interaction. They consist of formal rules and informal standards of behavior and of their enforcement characteristics. Formal rules include political (and juridical) rules, economic rules, and contracts...Given the bargaining strength and the interests of decision making parties, the function of the rules is to facilitate exchange, political or economic. Informal constraints include conventions that evolve as solutions to coordination problems and that all parties are interested in having maintained; norms of behavior that are recognized standards of conduct; and self-imposed codes of conduct such as personal standards of honesty and integrity. Conventions are self-enforcing. Norms of behavior are enforced by the second party (the threat of retaliation for contract violation) or by a third party (societal sanctions). North D. 1992, "Privatization, incentives, and economic performance", in H. Siebert (ed.) Privatization: Symposium in Honor of H. Giersch, Tubingen: J.C. Mohr.
• institutions also fulfill enabling functions, by stabilizing the environment for economic activity and by reducing uncertainty. 120
• the adaptability of institutions has been identified as the major determinant of sustained economic development. 122
• "a neoclassical vision of the world is one of flexibility". Little, I.M. 1982, p.25, Economic Development: Theory Policy and International Relations, New York: Basic Books.