Technology Choice and the Distribution of Income

Abstract

This article first explores the meaning that attaches to the flexibility in the choice of technology and defines the concept of equity in the distribution of income. It then proceeds to demonstrate how the ability to explore the limits of technological flexibility, both in its static and dynamic senses, can be linked to alternative distributional outcomes. The harshness of the typical import substitution sub-phase of development, the extent attention is paid to agricultural productivity growth, to the decentralization of industry, to the search for efficient labor intensity in both product mix and process choice, are all shown to make a substantial difference to the strength of the potential positive relationship between technology and equity. The real world experience of the East Asian developing countries that have managed to avoid conflict between growth and distribution largely via efficient technology choices is cited and contrasted with the more typical Latin American cases.