ABSTRACT
This chapter provides the main theoretical approaches to regional development and trade, and evaluates these theoretical views while taking the reality into consideration. It also provides notions for an alternative development policy framework while considering structural and functional problems of Caribbean economies. Historically, the Caribbean territories have had long political and economic associations with developed Western countries as colonies, protectorates and/or departments. The foreign trade sector is one of the spheres in which the dependence of Caribbean territories is most apparent. G. Myrdal's well-known theory of 'cumulative causation' is another important, but quite different, contribution within the radical tradition. Analysing the institutional conditions in Caribbean reveals substantial failures in the region, which has largely suffered from impeding prevailing institutions as well as a lack of institutional arrangements. Political independence established national sovereignty in older and newer nations of the Commonwealth Caribbean when both groups were integrated into the international system.
