The theory came about when his colleagues and he were troubled by the fact that economic growth in the advanced industrialized countries did not necessarily lead to growth in the poorer countries. They chalked it up to poor countries selling commodities to rich countries, which were then manufactured into other products and then sold back to the poor countries, but at much higher prices (Ferraro 2008). The economy of the poor countries then depended on how much of their commodities the richer countries would by, which depended on the rich countries …show more content…
First, the price of the C market is only determined in core nations, never in the nations where the product is actually coming from. Therefore, the prices paid within the developing countries are negotiated without them in mind. Worse of all, the developing countries have no say in the negotiation and must take the price as it is. Second, during the auction, which is held in Ethiopia, they use the market c to determine prices. The stability of the market is depended upon in order to pay a somewhat far price. This means the actual economy of the core nations is a huge factor in what the developing country is being paid. A poor economy would mean a poor market, which would mean the developing country would see their products value deplete. Whereas, a booming economy in the core nation would mean a healthy market, however, the developing country would not see their product’s value skyrocket. This is because the core nation would still pay the minimum amount for the developing countries