 Depends on a set of neoclassicals that are often inappropriate for developing economies, for example assumes that there is only one production sector or that all sectors are symmetrical. This does not allow for growth that generates a reallocation of capital and labor between sectors that are transformed during the process of structural change. According to Scott and Auerbach, the main ideas of the new growth theory can be traced back to Adam Smith and increasing returns to Marx's analysis. Srinivasan finds nothing new in the new growth theory because increasing returns and the endogeneity of the variables were taken from the neoclassical and Kaldor models. Fisher criticizes the new growth theory because it depends only on the growth function production and steady state Economic growth in developing countries is hampered by frequent inefficiencies arising from poor infrastructure, inadequate institutional structures etc. Since the endogenous theory neglects these influential factors, its applicability for the study of economic development is