Unbalanced Theories

Unbalanced theories are based on the principal that it is not possible especially in a developing country that all sectors can grow simultaneously at the same rate. Therefore, developing nations must look to invest more heavily in strategic sectors. The growth  in specialized sectors will transfer to other sectors of the economy later. Since developing countries face deficiency of capital, they can not simultaneously invest in all sectors of the economy. Therefore, it is necessary that they choose few strategic sectors in which they can specialize.

These theories also suggest strong relationship between private sector and government. They have been criticized for giving way to inflation in the economy.

Balanced Theories

Balanced theories are based on the principal that growth should be sought in all sectors ofthe economy at the same level. Therefore, economic growth should be based on growth in all sector of the economy. These theories are thus termed as "Balanced Theories", which propose balanced growth achieved through growth in all sectors of the economy.

These theories suggest that size of the market is very small in developing economics. Moreover, these economies face dearth of entrepreneurs. Therefore, the role of the government is very crucial in countries where balanced theories are practiced.