There a number of ways to alter the basic peasant/raglan dress pattern to give it a different look. One is by adding an elastic cinching to the bodice. It makes the dress more fitted and can be used for both creating a modern or a retro look (this was big in the early 70s).

To make this dress you will need to use both the instructions here and some of the instructions in the original raglan blouse tutorial, which is here.

When you cut out the pieces, you will want to somehow mark where you will place the casing for the bodice elastic. I make small snips where the elastic will hit on the side seams. Pencil makrks within the seam allowance will also work.

cut and mark bodice casing placement. click to enlarge

Next follow the instructions in the peasant/raglan blouse tutorial: sew the sleeves to the bodice pieces and make the sleeve and neck casings.

next add the elastic to the sleeve bottoms. DO NOT add elastic to the neck yet.

Next sew up one side seam.

The next few steps involve creating and attaching the casing for the bodice elastic.

1. Cut a strip of fabric 1.25 inches wide and at least the length of the dress.

2. Make narrow machine hems along the long edges of this strip.

3. Pin strip to bodice using your markings.

4. Sew the casing down by stitching along the top and the bottom.

Creating the bodice casing. Click to enlarge

Next insert elastic and pull to desired length and secure end with machine stitching. For final length I recommend 1 inch longer than your dolls chest measurement. However, your initial piece of elastic can be several inches longer than that.

Inserting elastic in the bodice casing. Click to enlarge.

Next insert elastic in the neck casing and follow the remaining raglan blouse instructions to complete.