This study adopts an historical approach in order to trace the successive evolution of economic development in Libya since 1900 to the present. It has been demonstrated throughout this research that during this period a number of significant events, both international and national in origin, have altered and consequently transformed the Libyan economy. Three major external forces which have been identified include: Italian colonialism (1911 - 1942), foreign administration and foreign aid (1942 - 1960), and multinational corporations (1955 to the present). These outside factors introduced a wide-scale exchange economy which was brought about largely by external capital and enterprise. They also made the Libyan economy highly integrated and incorporated into the world economy. The regional outcome of these factors, together with the Libyan government policies after independence, has been a marked spatial as well as social, economic and political concentration of investments and development efforts in few locations (particularly in the two major cities of Tripoli and Behghazi).