[1][2] The idea was developed by Raúl Prebisch and Hans Singer in the late 1940s; since that time, it has served as a major pillar of dependency theory and policies such as import substitution industrialization (ISI).
A common explanation for this supposed phenomenon is that manufactured goods have a greater income elasticity of demand than primary products, especially food.
Singer and Prebisch noticed a similar statistical pattern in long-run historical data on relative prices, but such regularity is consistent with a number of different explanations and policy stances.
In 1998, Singer argued that the thesis he pioneered has joined the mainstream: One indication of this is that the PST is now incorporated, both implicitly and explicitly, in the advice given by the Bretton Woods Institutions to developing countries.
Inspired by this, Raúl Prebisch presented a paper of his own discussing the decline at the United Nations Economic Commission for Latin America and the Caribbeans second annual meeting, in Havana in May 1949.