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The paper explores the central assumptions of the Neo-Classical, Structuralist, and Marxist theories of development in order to determine how these theories create real political parameters. The conclusion is that radical diagnoses of development/underdevelopment dominate academic thinking but conservative theories dominate policy formation. Given a choice between a flexible exchange rate policy and a national liberation struggle, policy makers in the Third World will opt for flexible exchange rates while justifying their actions in terms of more radical rhetoric.
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