What development economists miss in the Lewis Model and what the Lewis Model misses

Sender, John; Cramer, Christopher

Abstract

We argue in this paper that the Lewis Model is less wrong than many models in development economics but that it would be even less wrong, even more useful, if it were amended in two respects. First, the categorical ambiguity and binary dualism in the model are not only problematic but have become increasingly so. Too many development economists have been able to impose misleading assumptions on Lewis’s model, equating the low-productivity, non-capitalist sector (with its unlimited supplies of labour) with agriculture and higher productivity capitalist activity with ‘modern’, urban manufacturing. We show why this categorical ambiguity has become increasingly significant in the context of recent developments in global agricultural technology, investment and trade. The implication is that high-value agricultural exports may have many of the properties historically associated with the most dynamic forms of capitalist production. Second, we criticize Lewis’s analysis of the automatic mechanism (higher real wages) whereby capitalists induce migration to obtain the labour they require in Africa. We show how the dynamism of the model requires other deliberate interventions – policies to keep the fluid moving, to prompt the actors to follow the script. These policies have too often been ignored by economists because they involve not only conventional interventions such as subsidies, taxes, provision of infrastructure, but also and fundamentally consolidation of new social and political imperatives. Lewis and many subsequent development economists drawing on Lewis have paid insufficient attention to political factors determining labour migration, especially violence, worker’s struggles, coercive gender relations, and state interventions. The research underpinning our arguments includes rural labour market surveys in a number of African countries over more than 30 years, two rounds of interviews with high value agriculture producers in Ethiopia and South Africa, and a recent scoping exercise in the South African platinum belt town of Majakaneng and possible areas where analysis and practice may focus more in coming years.

Citation

Sender, J., & Cramer, C. (2025). What development economists miss in the Lewis Model and what the Lewis Model misses. London

• Working Paper Type: Working Paper
• Publication Date: Jun 1, 2025
• Deposit Date: Jan 23, 2025
• Publicly Available Date: Jul 1, 2025
• Pages: 20
• Series Title: SOAS Global Development. Working Papers
• Series Number: 4
• DOI: https://doi.org/10.25501/SOAS.00043309
• Keywords: Lewis Model, Surplus labour, Classification, High-value agriculture, Coercion, Labour mobilization, Gender