A dual economy is the existence of two separate economic sectors within one country, divided by different levels of development, technology, and different patterns of demand. The concept was originally created by

Julius Herman Boeke Julius Herman Boeke (Wormerveer, Netherlands, 15 November 1884 — Leiden, 9 January 1956) was a Dutch economist and lawyer. He was a professor of Dutch Constitutional Law at Leiden University, where he lectured and published works on the subject ...

to describe the coexistence of modern and traditional economic sectors in a colonial economy. Dual economies are common in

less developed countries A developing country is a sovereign state with a less-developed industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. There is also no clear agreemen ...

, where one sector is geared towards local needs and another to the global export market. Dual economies may exist within the same sector, for example a modern

plantation Plantations are farms specializing in cash crops, usually mainly planting a single crop, with perhaps ancillary areas for vegetables for eating and so on. Plantations, centered on a plantation house, grow crops including cotton, cannabis, tob ...

or other commercial

agricultural Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created f ...

entity operating in the midst of traditional cropping systems.

Sir Arthur Lewis Sir William Arthur Lewis (23 January 1915 – 15 June 1991) was a Saint Lucian economist and the James Madison Professor of Political Economy at Princeton University. Lewis was known for his contributions in the field of economic development. I ...

used the concept of a dualistic economy as the basis of his

labour supply In Mainstream economics, mainstream economic theories, the labour supply is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate. It is frequently represented graphically by a labour supply curve, ...

theory of rural-urban migration. Lewis distinguished between a rural low-income subsistence sector with surplus population, and an expanding urban capitalist sector (see Dual-sector model). The urban economy absorbed labor from rural areas (holding down urban wages) until the rural surplus was exhausted. A

World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...

comparison of sectoral growth in Côte d'Ivoire, Ghana and Zimbabwe since 1965 provided evidence against a basic dual economy model. The research implied that a positive link existed between growth in industry and growth in agriculture. The authors argued that for maximum economic growth, policymakers should have focused on agriculture and services as well as industrial development.

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