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Exchange and Development

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  • Erik Thorbecke
  • Peter Cornelisse

Abstract

The purpose of this paper is to present a framework explaining why different types of transactions occur in different settings- particularly in developing countries. The approach we propose is based on a new concept which we call ?exchange-configuration?. The latter consists of three building blocks or elements: the item exchanged; the actors engaged in decisions related to the item being exchanged; and, the environment ? physical, social, technological, and legal ? within which the actors operate. The characteristics of these elements, in different combinations, shape distinct types of exchange relations and transactions. Each particular combination of elements together with the formation process of the exchange and the resulting transaction is considered an exchange configuration. This new concept can clarify the dynamics of exchange by examining the forces that affect the elements of exchange. Two examples, one within the setting of a developing country and the other relating to the global financial crisis that started in 2007, illustrate the use of exchange configurations. JEL Classification: O10, L14, O11, O17.

Suggested Citation

  • Erik Thorbecke & Peter Cornelisse, 2014. "Exchange and Development," Revue d’économie du développement, De Boeck Université, vol. 22(HS01), pages 139-156.
    • Handle: RePEc:cai:edddbu:edd_hs01_0139
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    References listed on IDEAS

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    4. Meir Kohn, 2004. "Value and Exchange," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 303-339, Fall.
    5. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
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    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Iwan J Azis, 2019. "Cornell University & University of Indonesia, Indonesia," Annals of Social Sciences & Management studies, Juniper Publishers Inc., vol. 3(4), pages 87-91, June.

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    More about this item

    Keywords

    exchange; development; transactional relationship; micro-economic analyses of development; formal and informal sectors; institutional arrangements;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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