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How does Geographical Situation Affect Development
Development happens in context: it reflects what is happening in a place as a result of forces
operating at the same time across multiple scales. To understand why some countries are
poor and others are wealthy, we need to consider the context at multiple scales.
At the global scale, the European idea of a capitalist world-economy diffused across the world
with colonialism. The Industrial Revolution and colonialism made colonies dependent on the
colonizers and brought wealth to the colonial powers.
European Colonialism and the Diffusion of the Capitalist Model
European influence expanded across much of the rest of the world through two waves of
colonialism. In the 16th century, Spain and Portugal expanded their influence to far-flung
realms during the first wave of colonialism. Later, as it was joined by Britain, France, and the
Netherlands, the first wave of colonialism established a far-reaching economic system. After
independence movements in the Americas during the late 1700s and 1800s, a 2nd wave of
colonialism began in the 1800s. The major colonizers were again Britain, France, and the
Netherlands with Belgium, Germany and Italy joining the ranks of imperialists. Driven by
motives ranging from economic profit to the desire to bring Christianity to the rest of the
world, colonialism projected European power and a European approach to organizing
political and economic space into the non-European world. Europeans laid the ground rules
for the emerging international capitalist world economy, creating a system of
interdependence that persists today.
During the peak of colonialism, the imperialists exercised control over their domains and
organized them for economic exploitation. Infrastructure for efficient profiteering was
installed; entire populations were regimented in the service of the colonial order. Colonizers
organized the flows of raw materials for their own benefit, and we can still see the evidence
of that organization (plantations, ports, mines and railroads) on the cultural landscape.
Even after colonization ended, the economic, political and social links of the world economy
persist. In the capitalist world economy, the flow of capital changed little after the era of
decolonization in the decades after WWII. Many development scholars argue that, today, the poor
are experiencing neo-colonialism, whereby the major world powers control the economies of
poorer countries, even though the poorer countries are now politically independent. In many
cases raw material flows are as great as they were before the colonies gained independence.
Construction of the Capitalist World Economy
One of the most powerful impacts of colonialism was the construction of global order
characterized by great differences in economic and political power. Colonialism gave birth to
a globalized economic order in which European states and areas dominated by European
migrants emerged as major centers of economic and political activity. Through colonialism,
Europeans extracted wealth from colonies and made them subservient in the relationship.
Of course, not all Europeans profited equally from colonialism. Enormous poverty persisted
within the most powerful European states. Similarly, not all colonizers profited to the same
degree. In the 17th century, Spain had a large colonial empire, but it was economically
draining to Spain by then. Neither were the Western Europeans the only to profit from
colonialism. During the period of European colonialism (1500 – 1950), Russia and the U.S.
expanded over land instead of overseas, profiting from the taking of territory and the
subjugation of indigenous peoples. Japan was a regional colonial power, controlling Korea
and other parts of East and Southeast Asia through colonization. But the concentration of
wealth that colonialism brought to Western Europe, and to parts of the world dominated
by European settlers (such as the U.S., Canada and Australia), is at the heart of the highly
uneven global distribution of power that is still with us today.
The forces of colonialism played a key role in knitting together the economies of widely
separated areas – giving birth to a global economic order, the world economy. Wealth is
unevenly distributed in the world economy, as can be seen in statistics on per capita gross
national income (GNI): Haiti’s GNI is only $1,840 whereas Norway’s is $40,420. But to truly
understand why wealth is distributed unevenly, we cannot simply study each country in
isolation. Rather we need to understand how and where countries fit in the world economy.
That is why we need to see the big picture.
Dependency Theory
Some models are described as being “structuralist” because they hold that difficult-tochange, large scale economic arrangements limit what can happen in fundamental ways. The
development of the global economy created a structure (such as the concentration of wealth
and unequal relations among places) that make it very difficult for poorer regions to improve
their economic situation. Structuralists argue that these countries face a very different and
more difficult development circumstances than those faced by Western Europe.
Structuralists have developed a major body of thinking on development called dependency
theory, which holds that the political and economic relationships between countries and
regions of the world control and limit the economic development possibilities of poorer
areas. Dependency theorists note, for example, that colonialism created political and
economic structures that caused the colonies to become dependent on the colonial powers.
They further argue that such dependency helps sustain the prosperity of dominant regions
and the poverty of other regions, even after decolonization occurs.
Many poorer countries tie their currency into wealthy country’s currency, either by tying the
value of their currency to the wealthy country’s currency or by completely adopting the
wealthy country’s currency as their own, creating a significant link between the poor and
wealthy countries’ economies. For example, El Salvador has gone through a process of
dollarization, through which its currency, the colon, was abandoned in favor of the dollar.
For the people of El Salvador, dollarization made sense because the economies of the two
countries were tied long before dollarization occurred. Over 2 million Salvadorans live in the
U.S. and they send more than $2 billion in remittances to El Salvador annually. With this flow
of American dollars to El Salvador, many transactions occurred in dollars long before the
official switch. Also, over 2/3rds of El Salvador’s exports go to the U.S. But when the Federal
Reserve Board in the U.S controls the supply of dollars by altering interest rates, the
consequences are felt directly in El Salvador without their ability to control them.
Dependency theory sees little hope for economic prosperity in regions that have traditionally
been dominated by external powers. This aspect of dependency theory has been criticized,
since some traditionally “dependent” regions have made economic gains. Indeed,
dependency theory is based on generalizations about economic change that pay relatively
little attention to geographical differences in culture, politics, and society. It is not greatly
concerned with the spatial and cultural situation of places-central themes of geographical
analysis.
Wallerstein’s World-Systems Theory
As geographers, economists, and other social scientists came to realize that studying
economic development divorced from political and social context did not reflect reality;
geographers began to search for a development theory that encompassed geography, scale,
place, and culture. Wallerstein’s world-systems theory provides a useful framework.
Many geographers are drawn to world-systems theory because it is sensitive to
geographical differences and the relationship among development processes that occur in
different places. Specifically, Wallerstein’s division of the world into a three-tier structure –
the core, the periphery, and semi-periphery – helps explain the interconnections between
places in the global economy. To simplify, Wallerstein defines the three basic ideas of his
theory as:
1) The world economy has one market and a global division of labor.
According to Wallerstein, the development of a world economy began with the age of
exploration and Columbian Exchange after 1450 and encompassed the entire globe by 1900.
To generate a profit, producers seek the cheapest labor, drawing from the globe. As a result, a
corporation can move production of a good from North Carolina to Mexico and then to China.
In addition to the world labor supply, producers gain profit by commodifying whatever they
can. Commodification is the process of placing a price on a good and then buying, selling and
trading it. Companies create new products, generate new twists on old products, and create
demand through marketing. As children, no one over 40 could have imagined buying a bottle
of water. Now it’s done all the time.
2) Although the world has multiple political states, almost everything takes place
within the context of the world market.
Despite the existence of approximately 200 states, everything takes place within the context
of the world economy (and has since 1900). Colonialism set up this system by constructing
an interdependent global economy. When colonies became independent, gaining the legal
status of sovereign states was relatively easy for most; but gaining economic independence
was nearly impossible. The economies of the world are tied together, generating
consequences that fundamentally change places.
Not all core countries today were colonial powers, however. Countries such as Switzerland,
Singapore and South Korea have significant global economic power even though they were
never classic colonial powers. These positions were gained through these countries’
geographic or cultural access to the wealthiest parts of the world and their ability to take
advantage of that access.
3) The world economy has a three-tier structure.
World-systems theorists see the world economy as divided into the core, periphery and
semi-periphery. The core and the periphery are NOT just places but processes. Core
processes generate wealth in a place because they require higher levels of education, more
sophisticated technologies, and higher wages and benefits. When core processes are
embedded in a place wealth is generated for the people in that place achieving high levels of
socioeconomic prosperity and dominance in the global economy. Peripheral processes on the
other hand, require little education, lower technologies, and lower wages and benefits.
When they are embedded in a place (such as banana growers in Ecuador), the processes
often generate little wealth for people in that place. Periphery regions are poor regions that
are dependent on the core and do not have as much control over their own affairs,
economically or politically.
Geography and Context
The core and periphery are processes, but they happen in places. As a result, some
geographers have defined certain places as core and others as periphery in the world
economy. From the beginning, Wallerstein defined the semi-periphery only as places –
places where core and periphery processes are both occurring – places that are exploited by
the core but in turn exploit the periphery. By taking advantage of its cheap labor or lax
environmental standards, the core exploits the periphery. The semi-periphery acts as a
buffer between the core and periphery, preventing the polarization of the world into two
extremes.
The core-periphery model is fundamentally different from the other development models
because it holds that not all places CAN be equally wealthy in a capitalist world economy.
World-systems theory also makes the power relations among places clear and does not
assume that socioeconomic change will occur in the same way in all places. It is thus
sensitive to geographical context – at least in economic terms.
World-systems theory is applicable at scales beyond the state. A core-periphery relationship
can exist within a region, a state (country), or a local area. For example, L.A. can be
described as the core of the S. California region; the Johannesburg area can be described as
the core of South Africa; or the Central Business District can be described as the core of the
Sao Paulo, Brazil urban area.
Wallerstein’s work has encouraged many to see the world political map as a system of
interlinking parts that need to be understood in relation to one another and as a whole. As
such, the impact of world-systems theory has been considerable in political geography, and it
is increasingly commonplace for geographers to refer to the kinds of core-periphery
distinctions suggested by world-systems theory.
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Adapted from Human Geography: People, Place and Culture 9th edition by H.J de
Blij, etal.