Revisiting Prebisch and Singer: beyond the declining terms of trade thesis and on to technological capability development

Abstract

Rather than the thesis of a secular decline in the commodity terms of trade, Prebisch and Singer were more concerned with the income terms of trade. Consequently, they advocated (moderate) import substitution (IS) and recommended having it interweaved with export promotion (EP). To avoid technological dependence but achieve integrated industrialisation while coordinating IS with EP, Prebisch emphasised enhancing indigenous 'technological densities' and Singer stressed building the indigenous 'capacities to create wealth'. That means while foreign direct investments should be attracted, those activities should be managed and directed accordingly. Prebisch hoped to narrow the gap in centre--periphery technological uneven development while Singer aimed at tackling international dualism between rich and poor countries in the use of science and technology. Copyright The Author 2012. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.