Development Policy in a Multi-Provincial Economy (Invited Lecture) (Report‪)‬

1. INTRODUCTION In this paper, we present a stylized model for the study of development policy in a less developed country with several (rural) provinces, each with its own local economy, and a federal (urban) sector with a relatively more developed economic structure. A distinguishing characteristic of the model is that labour from each province is easily distinguishable from that of any other on the basis of (say) language, race, ethnicity, caste, gender or simply, accent. Each province has economic ties to the federal sector and to the world economy but no direct ties to any other province. Inter-provincial economic relations are a consequence of the relation which each province bears to the federal sector and to the world economy.