Arthur Lewis and the PBII Labs

Mark Hepworth Tue, April 04th, 2023

Last week, I visited with Manchester City Council about our May PBII Lab roundtable on the reprovisioning of social housing, and Greater Manchester Pension Fund, for whom we are developing a social impact reporting framework. Whilst there, I took the opportunity to visit the University of Manchester campus, specifically the ‘Arthur Lewis Building’. This is where my son Luke will be kicking off his geography degree in September.

W. Arthur Lewis, a Nobel Laureate and Britain’s first black professor, authored a standard text in development economics The Theory of Economic Growth (1955) during his time in Manchester. I read virtually everything he wrote as part of my post-graduate studies in economic development. I visited his grave in Saint Lucia, a few years back. It feels like I’ve gone full circle: Luke meet Arthur.

MH and Arthur Lewis

There is much to be learnt from Lewis, in particular his signature work on the ‘dual (sector) economy’ - an economy based upon two separate or distinct economic systems which co-exist in the same geographical space. Lewis was focused on the dual sector structure of developing countries whereby traditional subsistence agriculture supplied surplus labour to modern capitalist industries, but without sharing in the uplift in productivity and wages. Development economists have by now explained this truncated or dualistic pattern of economic growth. The Lewisian ‘dual sector’ model has its detractors, nevertheless it has stood the test of time.

Interestingly, Lewis applied the dual economy model to Manchester itself, founding Community House and the South Hulme Evening Centre to tackle discrimination among the Afro-Caribbean communities in Manchester during the 1950s. An impact study of these institution building projects by Mosley and Ingham (White Rose University Consortium, 2015) concluded:

‘Bridging social capital is precisely what Lewis’ evening centre, with its emphasis on advice and building key contacts complementary with its educational and social bonding functions, was seeking to provide in 1953. It is Lewis’ awareness of the importance of this factor which, alongside his awareness of the centrality of training and experimentation, constitutes the distinctive element in his approach to institution building in development.’
Mosley and Ingham (White Rose University Consortium, 2015)

My visit to Manchester got me thinking about the dual economy in Britain today and The Good Economy’s Place-Based Impact Investment (PBII) Labs. In every region of the country, the alternative realities of the dual economy have been laid bare by the unequal impacts of the COVID pandemic and the cost of living crisis on households and communities. Knowledge economy businesses thriving in the virtual world, consumer service businesses collapsing in the physical world; the detached home owner sunning herself in his back garden, council flat tenants with children caged in on the 10th floor. Dualism leads to “immiserising growth” – not inclusive growth. (Immiserising Growth: When Growth Fails the Poor by Paul Shaffer and others OUP, 2019)

The PBII Labs are an ‘institution’ building project spanning two sectors of Britain’s dual economy: global impact investment and local economic development. At our roundtables, representatives of these sectors meet in person, get to know each other’s needs and expectations, and then explore collaborative PBII solutions to pressing local problems. PBII Labs in South Essex (ASELA), Manchester and Bath address three areas of dualism in the housing sector: retrofit, social housing reprovisioning, and affordable homes for key workers and younger families. Success in the housing sector is pivotal given its key linkages with health, education and jobs, in one and the same place! The ‘P’ in PBII is about capturing these direct and indirect impacts for investors and communities, completely and in the here and now.

These are early days with the PBII Labs but we are cautiously optimistic that they will turn out to be the kind of institution building needed to combat dualism and inequality across geographies and sectors. To be launched in June, our PBII Network, with founding members from the local authority and financial sectors, will help to grow the ecosystem for future PBII Labs. Thank you, Arthur Lewis.

Listing and header photograph (of the Arthur Lewis Building - Manchester University) by Mike Peel (, CC BY-SA 4.0 <via Wikimedia Commons>