PIP: Critical comment on the proposal of Professor Pyatt for balanced development in Pakistan focused on broad methodological issues. Professor Pyatt's approach proposes to balance efficiency criteria with longterm objectives of sustainable economic and human development: changing asset distribution through new investment and shifting investment returns in the social sector to households. I is a systematic attempt to compensate for deficits in human development. Policies would include "tariffisation of quota allocation of goods such as water, differential pricing to protect the poor; national conservation and polluter penalties; foreign aid shift to human maintenance expenditure; and reform of fiscal policy on income and expenditure to allow for support of social objectives." Patterns of property and institutional privilege can be effectively altered through market practices, such that wage goods could be subsidized in order to increase productivity. Constructive rethinking of assumptions underlying the balanced development argument is suggested, because of Pyatt model is contrary to the Dornbusch assumptions behind structural adjustment of the standard World Bank model. The assumption in question is that nontraditional expenditure on health, education, and the environment reduces unit labor costs. Concern is also raised about the approach to "efficiency wages" and the inputs of health and education, and food and housing, which are required to supply labor. Real wages might be conceptualized as affecting labor productivity in a more dynamic way than Professor Pyatt recognized. Use of human capital would be maximized and would be equivalent to the formation of new human capital. Wages may be construed to act like internal trade, where prices and markets are effectively interchanged so that farmers receive not only agricultural products, but also essential and nonessential consumer goods. Professor Pyatt's article is relevant to any country's development planning and important because of the structural constraints that remain on development. Discussion will center on these issues when it becomes apparent that productive investment requires more than monetary stability.