Dual economy

An economy comprising two very different systems, and found in many developing countries where an advanced economy co-exists with a traditional economy and the two have very little contact with each other. In many less developed countries, a subsistence system operates side by side with, but quite independently of, cash cropping. This is a result of uneven development. The concept also applies to more developed economies, where core regions with large-scale, thriving industries compare with their less developed peripheries: northern Italy and the Mezzogiorno are often quoted as an example.

Certain geographers dislike the concept, arguing that it is too simplistic; why should there be only two elements, and are they necessarily completely distinct?

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A dual economy is the existence of two separate economic systems within one country, a concept created by Boeke. Dual economies are common in less developed countries, where one system is geared to local needs and another to the global export market.

Dual economies need not be across economic sector boundaries. An example of a dual economy within the same sector is a modern plantation or other commercial agricultural entity operating in the midst of traditional cropping systems.

Sir Arthur Lewis used the concept of a dualistic economy as the basis of his labour supply theory of rural-urban migration, prescribing that the path to self-sustaining growth was to be found by labour migrating from low-productivity rural areas to high-productivty urban areas.

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