Until very recently, the agreed-upon goal of economic development was thought to be aggregate economic growth. Now it is recognized that GNP measures are incomplete. To assess a country's economic performance and its progress toward economic development, we must supplement if not supplant the growth rate of GNP by other, more microeconomic measures.

How are we to do that? At least two research strategies suggest themselves. One approach, which the profession followed in the 1970s, is to emphasize growth but to weigh the growth performance by the distributional record. Another approach, more novel than the first, is to emphasize changing poverty and inequality as the principal indicators of development. Rather than asking whether the type of distributional pattern in a country promotes or hinders growth, the alternative approach asks instead if the rate and type of growth promote or hinder distributional goals. This book utilizes the second of these approaches.

In 1973, I began a series of studies that led ultimately to this book. I started with a belief in the usefulness of a microeconomic approach to the study of economic development. After several years of research, that conviction is renewed and reinforced.

The microeconomic framework I have adopted has far-reaching implications for the field of economic development. It requires that development economists look at labor markets, earnings structures, the distribution of productive activities and opportunities, and other less aggregative phenomena.