Answer: 2

Explanation:
The sentence, “Dualism was long held as the defining feature of developing countries in contrast to developed countries, where frontier technologies and high productivity were assumed to prevail,” introduces the concept of economic dualism as a distinguishing characteristic of developing versus developed economies. This sentence would work well as a foundation for the rest of the paragraph, setting up the idea of dualism and contrasting it between developing and developed economies.

Let’s consider each option:

• Option 1: This blank could potentially work as it is the paragraph’s opening, but placing the sentence here would make the subsequent transition to the core concept of “productive dualism” a bit abrupt, as there’s no specific setup for “productive dualism” as a term yet.
• Option 2: This blank is the most fitting because it follows the initial introduction of “productive dualism” as a central idea in development economics. The sentence would reinforce the historical perspective on dualism, highlighting how it was traditionally used to differentiate developing and developed countries. This placement also prepares readers for the upcoming discussion on the changing relevance of this dualism in contemporary economies.
• Option 3: This blank would not be ideal because it follows a shift to how this distinction has lost relevance over time. Placing the sentence here would disrupt the logical progression, as it would reintroduce the initial concept after it’s already been questioned.
• Option 4: This blank is also unsuitable, as it appears too late in the paragraph, after the focus has shifted toward the convergence and regional disparities in advanced economies.

Therefore, Option 2 is the correct answer, as it provides a cohesive and logical flow by reinforcing the background idea of dualism and contrasting developing and developed countries before discussing its changing relevance.