How does duel economy model explains spartial interaction between rural and urban areas through investment process according to Lee, E 1966 ?

The dual economy model, as proposed by economist E. Lee in 1966, explains the spatial interaction between rural and urban areas through the investment process by highlighting the unequal distribution of resources and economic activities between these two areas.

In the dual economy model, rural areas are characterized by traditional, subsistence-based agriculture and limited access to modern technology and infrastructure. On the other hand, urban areas are characterized by industrialization, modernization, and a higher level of economic development.

According to Lee, the investment process plays a crucial role in shaping the spatial interaction between rural and urban areas. In the dual economy model, investment flows from urban to rural areas are limited due to the lack of infrastructure, technology, and skilled labor in rural areas. This leads to a concentration of investment and economic activities in urban areas, resulting in a widening gap between rural and urban areas in terms of economic development.

Furthermore, the dual economy model suggests that the spatial interaction between rural and urban areas is influenced by the uneven distribution of resources and economic activities. As urban areas attract more investment and economic activities, they become more developed and prosperous, while rural areas continue to lag behind.

Overall, the dual economy model explains the spatial interaction between rural and urban areas through the investment process by highlighting the unequal distribution of resources and economic activities between these two areas. This model emphasizes the need for policies and interventions to promote balanced regional development and reduce disparities between rural and urban areas.

Lee's Duel Economy Model of Spatial Interaction

Economist Everett S. Lee proposed the "Duel Economy Model" in 1966 to explain the spatial interaction between rural and urban areas through the investment process.

Key Assumptions:

- The economy is divided into two sectors: a modern sector and a traditional sector.
- The modern sector is characterized by high productivity, technological innovation, and capital intensity.
- The traditional sector is characterized by low productivity, labor-intensive methods, and subsistence farming.

Spatial Interaction Through Investment:

Lee argues that investment plays a crucial role in driving spatial interaction between rural and urban areas:

1. Investment in the Modern Sector:

- Investment in the modern sector creates jobs and raises incomes in urban areas.
- This attracts labor from rural areas to urban centers, leading to rural-to-urban migration.

2. Investment in the Traditional Sector:

- Investment in the traditional sector improves productivity in rural areas.
- This creates incentives for rural residents to remain in their communities, reducing migration to urban areas.

3. Infrastructure Investment:

- Investment in infrastructure, such as roads and transportation, connects rural and urban areas.
- This facilitates the flow of goods, labor, and capital between the two sectors.

Implications:

- The duel economy model suggests that investment in both the modern and traditional sectors can lead to balanced spatial development.
- By investing in rural areas, governments can reduce rural-to-urban migration and foster economic growth in both sectors.
- Infrastructure investment can play a key role in promoting connectivity and facilitating spatial interaction.

Limitations:

- The model assumes a sharp distinction between the modern and traditional sectors, which may not always be realistic.
- It does not consider other factors that influence spatial interaction, such as social and cultural ties.
- The model may underestimate the impact of technological change and globalization on rural-urban interactions.