The Purpose of Wage Policy in Developing Countries

In the Symposium’s view, wage levels and structures, together with their development over time, are very important economic and social phenomena in developing countries. The fact that they have been neglected in economic plans and that in some countries they might not appear to have had much of an impact on economic developments1 must not be allowed to cloud their importance.2 The participants also agreed that, in most developing countries, wage levels and structures, as determined by the operation of the spontaneous processes of the labour market, for various reasons are not in general acceptable.3 One of the mildest expressions of the undesirability of the results which flow from these spontaneous labour market processes was voiced by Prof. Berg, who believed that only the distorting effect of ‘high-wage islands’ requires the authorities to formulate a wage policy for the private sector.4 Mr Amin, too, in both his papers and his statements showed a greater willingness than other participants to accept wage levels and structures as currently determined by these spontaneous processes.