| There are two distinct traditions that have widely different views on the fundamental problem of economic development. This dissertation makes a contribution to the tradition known as the Scarcity in the Midst of Plenty Approach, which views the problem as an inability of less developed economies to fully utilize their existing resources because of demand constraints. The result of this situation is that these economies are frequently left with an inefficient production structure, high levels of structural underemployment, and few investment inducements that can ameliorate it. In order to solve this problem, the author argues that a development strategy must be implemented that is capable of combining short term demand targeting with long term structural change. Accordingly, the thesis of this dissertation is that the combination of balanced growth, employer of last resort, and the developmental state can serve as a development strategy that can successfully combine these two elements as well as minimize structural underemployment. Consequently, we argue that this strategy can initiate and/or sustain a development process in less developed economies. Our results demonstrate that this is indeed the case. |
