Download Alternative Views of Development

World Systems Approach
• Builds on Dominance – Dependence
Theory
• Countries don’t go through stages – the
“system” does
• Also believes that countries are poor
because they are stuck on the “periphery”
or edges of the world economy – and kept
there by “core” countries
• Uses the term “Core” instead of “Centre”
for the Dominant states
World Systems Approach
• Late 18th / early 19th centuries marked a
turning point in capitalism – capitalists
achieved power in key countries which
furthered the industrial revolution (eg Britain).
• Believes there are three types of
countries
1. Core = Centre / Dominant
2. Semi-periphery = Cores on the way
“down”, or Peripheries on the way “up”!
3. Periphery = Dependent
World Systems Approach
1. Core countries:
• The most economically diversified, wealthy,
and powerful (economically and militarily)
• Have strong central governments, controlling
extensive bureaucracies and powerful
militaries
• Have more complex and stronger state
institutions that help manage economic affairs
internally and externally
• Have a sufficient tax base so these state
institutions can provide infrastructure for a
strong economy
World Systems Approach
1. Core countries:
• Highly industrialized; produce manufactured goods
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rather than raw materials for export
Increasingly tend to specialize in information,
finance and service industries
More often in the forefront of new technologies and
new industries. Examples today include hightechnology electronic and biotechnology industries.
Another example would be assembly-line auto
production in the early twentieth century.
Has strong bourgeois and working classes
Have significant means of influence over noncore
nations
Relatively independent of outside control
World Systems Approach
1. Core countries: gain • Access to a large quantity of raw
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material
Cheap labour
Enormous profits from direct capital
investments
A market for exports
Skilled professional labour through
migration of these people from the
periphery to the core.
World Systems Approach
1. Core countries:
• Sometimes one core country or region
will become a “hegemon” or “supercore”
• Portugal / Spain in the 16th century
• North-West Europe (France, Holland,
Britain) in the 18th / 19th centuries
• USA in the 20th century
World Systems Approach
2. Semi-periphery countries:
• Part way between the core and
periphery.
• Usually countries moving
towards industrialization and a
more diversified economy
• But can come from declining
cores.
World Systems Approach
2. Semi-periphery countries:
• They may be dominated by core
countries, but may also partially
dominate periphery countries
• Spain and Portugal: - fell from their early
core position, but still manage to retain
influence in Latin America. They
imported silver and gold from their
colonies, but then had to use it to pay
for manufactured goods from core
countries such as England and France.
World Systems Approach
3. Periphery countries:
• Least economically diversified
• Relatively weak governments
• Relatively weak institutions with little
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tax base to support infrastructure
development
Depend on one type of economic
activity, often on extracting and
exporting raw materials to core
nations, cash crops etc
Least industrialized
World Systems Approach
3. Periphery countries:
• Targets for investments from
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multinational corporations. Come into
the country to exploit cheap unskilled
labour for export back to core nations
Small bourgeois and large peasant
classes
High percentage of people poor and
uneducated.
Inequality very high - a small upper class
(elite) owns most of the land and has
profitable ties to multinational
corporations
World Systems Approach
3. Periphery countries:
• Extensively influenced by core
nations and their multinational
corporations. Many times they are
forced to follow economic policies
that favour core nations and harm
the long-term economic prospects of
periphery nations.
• Historically, peripheries were found
outside Europe, for example in Latin
America, Asia, Africa.
World History According to the World Systems Approach
• 15th century – Spain and Portugal lead the way
but overextended themselves with empire
building
• Gained huge wealth from colonies but fell
behind in industrial production
• 17th century – Holland with its new financial
system based on global capitalism (which
others copied eg Britain)
• Holland also had many colonies eg East Indies
• As the Dutch economy grew and standard of
living rose its costs of production went up!
Began to invest overseas eg British industry
World History According to the World Systems Approach
• 19th century – Britain became the “hegemon”
• Highly industrialised, capitalism thriving
• Massive growth in colonisation eg NZ
• This cost a lot of money so their clear
dominance ended
• By 1900 the old European “core” claimed 85%
of the world’s territory!
• The only way to gain land was through war
against other “core” nations – eg Germany,
Japan, Italy
• A truly “global economy” emerging
World History According to the World Systems Approach
• Post World War 1 – the “American Century” –
USA a “hegemon”
• Rapid industrialisation after the 1860’s Civil
War, helped by investment from Britain,
Holland
• After World War 2 the USA had over ½ the
world’s industrial production, 2/3 of gold
reserves, 1/3 of world’s exports
• Since the 1990’s USA “hegemony” has been
eroding.
World History According to the World Systems Approach
• The “core” is now Europe + USA + Japan
• Others approaching eg South Korea, China
• Semi – periphery = states that have been long
independent but have not yet reached Western
levels of influence eg Brazil, India? NZ and
Australia?
• Periphery = poor former Western colonies eg
Southeast Asia, Africa
Major Critics
(1)The above discussion has shown that both world-
system and dependency theorists, while somewhat
different from each other, share the same
methodology – “looking outward” and attributing
underdevelopment to its external relations in the
world market and international system that are
governed by the interests of dominant nations and
of certain classes and groups in them. However,
both dependency and world-system theorists
overlook the impact of the internal constraints of the
underdeveloped countries -- the economic, political,
social, and cultural characteristics and structures of
these countries -- upon the development of the
underdeveloped areas and countries.
Major Critics
(2) For the policy implications under this
category, breaking-up of the old system is
seen as necessary before the establishment
of “an equalitarian world-system;” in the
meanwhile, the periphery states should
cooperate to offset the power of the core.
However, this involves them in a
problematic relation with the global
economic dynamics that underlies the
change of the world-system and the
possibilities in the direction of development
at every occurrence of upward and
Who is right?
Three theories have provided three solutions
to the Third World development:
- Increase of modernity
- Independence and de-linking from the world
economy
- Reform of the world system
Q: Which side do you think has more power
for explaining the Third World development in
the last several decades?