Trading relations have been changed during the 1970s as major industrialized countries have instituted preferential tariff schemes with developing countries in order to generate the transfer of resources. The effects of this concept, which operates as a form of assistance, have been analyzed in terms, not only of the standard customs union, but in the context of the political motives and domestic goals of the countries involved. Preferential access is examined as a potential trade-off, with emphasis on the role generalized and nonreciprocating preferences play in generating resource transfer to developing countries. The shift is seen as the result of the increasing cost of direct aid to developing countries as well as the desire of the developing countries to have more than one level of aid. 24 references. (DCK)

A three-factor model of a small country or region is used to analyze the general equilibrium consequences of three frequently advocated regional development policies--investment subsidies, migration incentives, and educational expenditures. The analysis focuses on policy-induced changes in absolute and relative factor earnings. The results link changes in the distribution of income to the degree of complementarity and substitutability among factors of production and to the pricing scheme adopted by educational institutions. Programs intended to aid lagging regions may produce perverse results, particularly if the cost of education is the same to all individuals regardless of ability.

A three-factor model of a small country or region is used to analyze the general equilibrium consequences of three frequently advocated regional development policies--investment subsidies, migration incentives, and educational expenditures. The analysis focuses on policy-induced changes in absolute and relative factor earnings. The results link changes in the distribution of income to the degree of complementarity and substitutability among factors of production and to the pricing scheme adopted by educational institutions. Programs intended to aid lagging regions may produce perverse results, particularly if the cost of education is the same to all individuals regardless of ability.