Exchange and Development

Exchange and Development

An Anatomy of Economic Transactions

Peter A. Cornelisse and Erik Thorbecke

This innovative and important book develops a new framework for analysing exchange that takes place within and outside markets over the course of development.

Chapter 7: The Dynamic Forces in Exchange Configurations

Peter A. Cornelisse and Erik Thorbecke

Subjects: development studies, development economics, economics and finance, development economics, institutional economics


OVERVIEW This chapter is concerned with the dynamics of exchange configurations. So the main task here is to explain how one state of exchange configurations springs from the foregoing. In the following pages it will be argued that a multitude of forces can be distinguished that move configurations from one state to another. As will be seen, these forces differ from each other in their origins and in the ways they make their impact felt. In the following, we sometimes use the term ‘evolution’ as an alternative for the dynamics of exchange configurations. Social scientists attach different and sometimes unclear meanings to the term.1 Hence, in order to avoid confusion, it must be added that we use ‘evolution’ in a non-Darwinian sense. As will be seen below, the dynamics of exchange configurations are driven to a large degree by considered, even if sometimes ill-fated, decisions taken by actors/decision makers and public policy makers. Clearly, such a view conflicts with a strictly Darwinian concept of evolution. The number of dynamic forces that modify exchange configurations is fairly large. As they also vary strongly in nature, it is necessary to group them in order to bring structure into the discussion. Therefore, Section 7.2 starts by distinguishing four main groups of forces of change applying two criteria, ‘endogeneity’ and intention. The intentional dynamic forces in exchange configurations are nearly always triggered by an evaluation of the outcomes of existing transactions. This is why Section 7.3 is devoted to a brief discussion of evaluation...

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