Outline for 12/3: The North-South Gap II

Imperialism

Decolonization

World Systems Theory

Dependencia

NIEO

“bad” institutions

Start where we left off: the North-South Gap over Time

Why a Growing North-South Gap through at least the 1970s?

1. North starts out with a geographic advantage

Temperates (N) vs. tropics (S)

More compact economic geographies in N

Why a Growing North-South Gap through at least the 1970s?

2. Exploitation of the Global South: imperialism beginning circa 1500

How might being a colony hurt economic development?

British Empire

French Empire

Spanish Empire

Portuguese Empire

Dutch Empire

Belgian Empire

But with rapid decolonization after WWII, shouldn’t the N-S Gap begin to decline in the 1950s?

World Systems Theory

Core (N)

Periphery (S)

Policy recommendations from World Systems Theory?

Dependencia

International economy is not one of interdependence (per institutionalism and free trade theory)

Instead, the capitalist international economy is characterized by 3rd World dependence.

Trade

FDI

Foreign debt

Policy recommendations from Dependency Theory?

New International Economic Order (NIEO)

Proposals put forth beginning in 1960s (often in UNGA)

Southern countries should be able to:

Regulate MNCs and their FDI activities

Establish producer cartels

Protect their domestic markets

Northern countries should provide more foreign aid

New trade institution (as alternative to GATT): UNCTAD

Successful?

“Bad” institutions

Many developing countries have bad political institutions:

weak governments who cannot enforce law /order or guarantee property rights

strong and corrupt governments who over-tax and over-manage their economies

Bad institutions slow economic growth

How linked to colonialism/decolonization?

Exceptions? Good governments/institutions in the South?

Policy recommendations based on this argument?