A bit different than a raglan, this circular yoke is more akin to Fair Isle or Norwegian patterned winter sweaters. Knit from the top down with two rounds of increases (K2, M1 across, ending with K2) several rows apart in the yoke for this size (Blythe, Pure Neemo S). The sleeves are picked up onto stitch holders while the body is finished below the bust. Then the sleeves are picked up on 3 dp needles and knit in the round down to the sleeve hem. For larger dolls, you may need an additional round of increases. I make 3 YO, K2tog buttonholes for back closure on rows 3, 7, an 11. 

I love the detail of hand smocking and included it on this dress; a dainty crochet collar finishes it off. the The dress can be seen in my etsy store.