Question

Critical minimum effort theory was designed by which of the following given economist ?
1. H.Leibenstien
2. Rosenstein Rodan
3. W.W.Rostow
4. None of above

Answer 1

Correct Answer - Option 1 : H.Leibenstien

The correct answer is H.Leibenstien.

 

• Harvey Leibenstein was a Ukrainian-born American Jewish economist.
• One of his most important contributions to economics was the concept of X-inefficiency and the critical minimum effort thesis in development economics.
• ‘Theory of critical minimum effort’ is an attempt to provide a solution to this economic problem.
• According to him, critical minimum effort is necessary to achieve steady economic growth raising per capita income.
• The main idea of the theory is that economic growth in the underdeveloped and overpopulated countries is not possible unless a certain minimum level of investment is injected into the system as a consolidated dose that pulls the system out of doldrums.
• This minimum level of investment is called ‘critical minimum effort’.