Following the end of Second World War, the industrialized countries of the world began to loosen their political control over those countries that were formerly their colonies. Most capitalist and anti-imperialist economists had postulated that once free of the colonial yoke underdeveloped countries would move rapidly toward industrialization and higher standards of living (Palma, 1978, pp. 881-924). Marxist economists did not share this opinion, contending instead that the proletariat in these countries would need to wrest control of the state from the oligarchy before an improvement in the economic well being of the masses could occur.
As it happened, political freedom did not translate into the economic transformation that had been predicted for the former colonies. While the apologists for capitalism were stumped, however, so too were the defenders of Marxist economics (Palma, 1978, pp. 881-924). Attempted explanations offered within the contexts of the then well accepted diffusion and structuralist models were simply ineffective.
The diffusion model holds that progress is a function of the spread of modernism to backward, archaic, and traditional economies, and that the principal factors leading to development are advanced technology and an infusion of foreign capital (Wallerstein, 1979, p. 24). In this model, development is equated with industrialization and increased economic diversification. The diffusion model views development as a gradual process.
The structuralist model of economic development attributes under development to structural deficiencies in a country's economy (Gudeman, 1978, pp. 121-141). These structural deficiencies are most often defined in the contexts of the need for land reform, problems associated with single-crop or single-resource economies, and problems associated with an excessive concentration of wealth and income within a country.
In the wake of the explanatory failure of...