4.1 Dualism and structural transformation: the Lewis model
The celebrated Lewis (1954) model still provides the starting point for understanding African
dualism as resulting from low demand for labour in the modern sector. The model features a
large traditional sector with subsistence incomes and a small modern sector paying much higher
wages. The process of economic development involves expansion of the modern (formal) sector
through capital accumulation, gradually absorbing surplus labour from the subsistence (informal)
sector.