Socio-Economic Analysis of Dualistic Economies: A Review of Methodological Alternatives

Many of the less developed countries not only are internally segmented and differentiated by different socio-economic-technological environments, but also have different socioeconomic groups/classes. Contrary to the mainstream economists’ fiction of perfectly competitive markets instituted in a harmonious and well-ordered societal system, markets in these countries are usually less organized, inadequately monetized, and, therefore, the transactional modes of developed market economies exist only in some limited degree. The nature of their economic growth and development, and the resulting pattern of resource allocation and income distribution, are often determined more in the socio-political arena than in the market place. To identify, understand, and explain this systemic structural mechanisms of the developing world better, the socio-economic methodologies of structuralism, functionalism, and institutionalism are more relevant than the orthodox economists’ methodology of atomistic choice theory. Functional dualism, rather than economic dualism, is, for example, an appropriate analytical concept for the socio-economic analysis of dualistic economies.