The contemporary character of the two circuits of the urban economy reflects the incorporation of Third World national economies into the world economic system. This process has been conceptualised as a series of modernisations, defined as the diffusion of an innovation from a core region (developed countries) to a peripheral subordinate region (Third World countries). This perspective does not embrace the now discredited notion of modernisation as a unilinear process of social and economic change through which all societies pass in the course of development. Santos (1979) identifies three major modernisations and their effect on the Third World urban economy: