ABSTRACT

One of the most influential views in the post-war development policy debate has been the Prebisch-Singer hypothesis concerning a structural tendency for the net barter terms of trade (NBTT) of developing countries (DCs) to deteriorate in their dealings with the industrialised (developed) countries (ICs). Prebisch (1950) and Singer (1950) launched this hypothesis at a time when the export structure of DCs was dominated by primary products. Reflecting this initial condition, the debate on the long-term deterioration in NBTT has been carried out assuming a close overlap between the NBTT of primary commodities relative to manufactures and the NBTT of the periphery relative to the centre. Since about the late 1960s there has, however, been a continuous and considerable shift in the export structure of DCs away from primary commodities and towards manufactured goods.2 In this context, it is pertinent to pose the question whether this emerging trade pattern has allowed developing countries to escape unequal exchange relations with the developed countries.