Structure of the international commodity market and the development of the south.

Abstract

Various schools of thought have been advanced to explain the problem of underdevelopment in the South. They include the neoclassical, the structuralist and the dependency schools. The neoclassical view of the situation is blamed on Internal 'policy mistakes' which is underpinned by price distortions in both product and factor markets. The structuralist and dependency schools, however, see the problem beyond national boundaries and within the framework of international economic relations. For them, the relevant level of analysis is 'macro': there is but one world economy, it is capitalist, and that the performance of national economies is determined by their location within this system. Thus the problem of underdevelopment In the South is a matter of relations in distribution of the gains from trade. While the structuralists seek to ex-plain the basic problems of the south in terms of certain special structural bottleneck of her production and foreign trade, the dependency school, in a more radical way, asserts that the peripheral nations (the South) remain underdeveloped precisely because they have borne and continue to bear the cost of developing the centre (the North). This paper examines the international commodity market with a view to identifying the main structural feature that have been considered disadvantageous for the development of the south, using structural-dependence analysis. It commences with of the south an analysis of the structure of international trade, followed by an exposition on the nature of the distribution of the gains from trade. Finally, policy options open to the South are outlined. The author's conclusions are that there are strong North-South trade links within a framework of domination by the Nord, and that relationship biases the distribution of the gains from trade in favour of the No and against the South. This, then, calls r a determined effort on the part of the leads hip of the South for increases South-S trade.