Critically evaluate the theory of critical minimum effort. Also bring out its limitations.

The theory of critical minimum effort is associated with the name of Harvey Leibenstein. The theory is based on the relationship between the three factors, viz. (i) per capita income, (ii) population growth, and (iii) investment.

Leibenstein identified population also an income-depressing factor (or a), whereas investment is an income-generating factor.

Growth in an economy is possible when the income- generating factors turnout to be more powerful than the income-depressing factors. A small additional investment may generate a small income.

The additional income would be eaten up by the additions to the population which may come in the wake of the additional income, and hence the effort may fail to generals a cumulative process of growth.

What is required is an initial substantially large volume of investment that may create conditions which should outweigh the growth of population, i.e., if necessary it is necessary that the initial effort or the initial series of efforts must be above a certain minimum magnitude.

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