View/Open - University of Zululand Institutional Repository
View/Open - University of Zululand Institutional Repository
View/Open - University of Zululand Institutional Repository
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The Lewis structuralist model is an important example <strong>of</strong>this type <strong>of</strong>model. It is a structural<br />
change model that explains how labour transfers in a dual economy. According to the Lewis<br />
model, the growth <strong>of</strong> the industrial sector <strong>of</strong> any town, city or country drives economic<br />
growth <strong>of</strong>the particular place fwww.tutor2u.net/economicslcontent/development. (2007)].<br />
In the context <strong>of</strong> urban industrialisation and development the Lewis structuralist model IS<br />
characterised by the following attributes:<br />
• With increasing mechanization <strong>of</strong>industry, there is a smaller demand for labour.<br />
• People earning money may do a number <strong>of</strong> things with it. They may spend it rather<br />
than save it. This would mean less savings (investment) would be available for capital<br />
formation purposes.<br />
• Developing countries have seen increased urbanization as people go in search <strong>of</strong>work.<br />
However, industry in developing countries cannot cope with the demand for work and<br />
urban poverty is becoming as much <strong>of</strong>a problem as rural poverty.<br />
• The focus on industrialization leads to overlooking the needs <strong>of</strong>rural communities and<br />
peri-urban communities.<br />
• Too much power is given to government (Brett et al.. 2005).<br />
The current situation <strong>of</strong>the study area suggests that there is a certain degree <strong>of</strong> resemblance to<br />
the above-mentioned structuralist model. However, it should be noted that there are some<br />
differences in this relationship. For example, there is no significant industrial activity taking<br />
place that public sector is advancing in Ulundi. Notwithstanding, the local economy shows<br />
some traces <strong>of</strong> dualism reflecting differences between the rural and urban continuum. This<br />
study investigates the steps taken by stakeholders to alleviate the poverty cycle in Ulundi.<br />
33.4 The Neo-classical model<br />
This model emerged in the 1980s in response to the Lewis structuralist model. Stagnation in<br />
economies was seen as a result <strong>of</strong> poorly designed economic policies and too much<br />
interference by government. Privati;:ation was proposed as a means to stimulate industry.<br />
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