THE PAKISTAN DEVELOPMENT REVIEW
The Transition in Open Dualistic Economies. By Douglas Paauw and John Fei. New Haven: Yale University Press. 1973. 306 pp.Price! 12.50
This book is concerned with a special type of less developed countries having open dualistic economies. It deals with transition growth, the postwar era of 1950—1970, which is a relatively short period, sandwiched between the two long epochs of colonial growth and modern economic growth. The hallmark of the colonial epoch is the imposition of foreign political control on the agrarian economy of the colony to result in a heavy reliance upon primary product exports. The non-agricultural sector and the commercialized agricultural sector form an enclave which is “involved in a triangular pattern of resource utilization with the foreign sector.” The economic goal of colonialism is to extract from the colony the maximum export surplus. This feature of colonial growth is vital to the examination of the transition growth process because the subsequent experience of the colony after political independence depends on how these export profits are employed. The main point of the book is that the use of export profits to alter the economic structure differs among countries, and the authors identify two types of experience. The first is economic nationalism, under which the trade- related profits are utilized for a thorough change in the production and trade patterns. The second is neocolonialism in which, by contrast, the trade- related profits are employed to strengthen and perpetuate the colonial pattern of growth. Taiwan and the Philippines are cited as examples of economic nationalist transition growth while Malaysia and Thailand are examples of the neocolonial pattern of growth.