Hostname: page-component-78c5997874-fbnjt Total loading time: 0 Render date: 2024-11-08T11:29:57.520Z Has data issue: false hasContentIssue false
  • English
  • Français

The political economy of North-South relations: How much change?

Published online by Cambridge University Press:  22 May 2009

Roger D. Hansen
Get access

Abstract

At the present time the spectrum of views on the probabilities for major change in the present political economy of North-South relations is very broad. Some scholars predict a significant increase in the bargaining strength of the developing countries; others suggest that the asymmetrical interdependences in today's political economy are unlikely to produce major alterations in North-South bargaining power in the near future. This article examines some of the empirical and theoretical evidence which seems most relevant to the outcome of the present conflict between the Third World and the industrialized states and concludes that arguments predicting major structural changes in. North-South economic relations may have overstated their case.

Type
Articles
Information
International Organization , Volume 29 , Issue 4 , Fall 1975 , pp. 921 - 947
Copyright
Copyright © The IO Foundation 1975

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Gardner, Richard N., “Report of the Seminar,” in the World Food and Energy Crises: The Role of International Organizations (Renssalaerville, N.Y.: The Institute of Man and Science, 1974), p. 3Google Scholar.

2 In this essay the term North will be used as shorthand for the world's rich industrial states. They include most European countries, the United States, Canada, Japan, Australia and New Zealand. Most are members of the Organization for Economic Cooperation and Development (OECD), and are occasionally referred to in the essay as “the OECD countries.” Average per capita income in these countries generally exceeds $2,000.

The term South will be used as shorthand for the world's “less developed” or “developing” states, ranging from the suddenly rich but yet-to-industrialize oil states of the Middle East to the so-called “Fourth World” states-the poorest countries of the globe located for the most part on the Indian subcontinent, Africa and the Caribbean region. Most of the population of the poorest stratum of countries is located in India, Pakistan, Bangladesh and Sri Lanka, where upwards of three-quarters of the population have per capita incomes of less than $75. Average per capita incomes for the Fourth World as a whole are under $150.

Between the Fourth World and the suddenly wealthy oil countries one finds the so-called “Third World,” encompassing most Latin American countries and others from Asia and Africa. Many of these states are at least semi-industrialized, and have average per capita incomes in the $400–$800 range.

To cover this heterogeneous grouping of over 100 states, the single label “South” may seem terribly imprecise and misleading. However, as the essay demonstrates, there is at least a twenty-year history of bargaining between these countries on the one hand and the industrialized countries on the other, which has given more than minimal empirical content to the term. How much content there is, and how committed these countries are to organizing and operating as a bloc of states in negotiations with the industrial world is one of the issues explored at length in the essay.

Time and space do not permit an examination of the interactions between the South and the North on the one hand and the “East,” (“Communist countries” or “command economies”) on the other. Since these latter countries have participated only marginally in the international economic system analyzed in this essay, the omission is not important for its purposes.

3 See Bergsten, C. Fred, “The New Era in World Commodity Markets,” Challenge, 09/10 1974Google Scholar.

4 Such changes might theoretically take place in one or all of several fields including trade, aid and international monetary relationships, and in international markets for capital and technology.

5 Brzezinski, Zbigniew, “U.S. Foreign Policy: The Search for Focus,” Foreign Affairs 51, no. 4, 07 (1973), p. 726CrossRefGoogle Scholar. From the larger context of Brzezinski's article, I assume he is speaking of equality not in the juridical but rather in the socio-economic sense in this passage.

6 On the renewed potential for serious confrontation over the issue of income distribution within the United States, see Alice M. Rivlin's 1974 Richard T. Ely Lecture presented to the American Economic Association entitled, “Income Distribution-Can Economists Help?” (mimeo).

7 See Chenery, Hollis et al. , Redistribution with Growth, published for the World Bank and the Institute for Development Studies, University of Sussex, by the Oxford University Press (Oxford, 1974)Google Scholar for a discussion of present profiles of global and domestic income distribution and of strategies for redistributing income within developing countries.

8 For an example of the former, see Gardner, p. 65; for an example of the latter, see Bundy, McGeorge, “After the Deluge, the Covenant,” The Saturday Review, 08 24, 1974, pp. 18 ffGoogle Scholar.

9 Barnet, Richard J. and Muller, Ronald E., Global Reach: The Power of the Multinational Corporations (New York: Simon & Schuster, 1974), chapter 8Google Scholar.

10 To the degree that the 1974 food issue was thought to be a “disaster relief” problem by US elite groups, attempts on the part of many of them (including some well-placed Congressmen and Senators) to pressure the US government to “do more” would not be an appropriate measure of attitudes concerning the larger “equity” or “world order” issues.

11 At a February, 1975 meeting of 110 developing countries in Dakar, held to coordinate strategies for an upcoming UNCTAD meeting, the OPEC countries were publicly urged to increase their present levels of aid flows. See the New York Times report of February 5, 1975.

12 See, for example, Johnson, Harry G., Economic Policies Toward Less Developed Countries (Washington, D.C.: The Brookings Institution, 1967), chapter 3Google Scholar.

13 The soundness of the schemes suggested has varied widely, as have Northern responses to them. For one of the most comprehensive and rigorous discussions of the various Southern schemes as presented through UNCTAD, see Johnson, passim.

14 For the latest and most comprehensive analysis of the negative aspects of foreign direct investment on the development process in the South, see Barnet and Mullet, especially Part II and the studies cited therein. Barnet and Muller argue that the net effect of foreign direct investment on the development process is negative; this conclusion follows at least in part from their definition of development which focuses on better living standards for the poorest 60 percent of developing country populations rather than on aggregate growth rates.

For a broader spectrum of views on this issue, see Robert O. Keohane and Van Dorn Ooms, “The Multinational Firm and International Regulation” (forthcoming); the same authors, “The Multinational Enterprise and World Political Economy,” International Organization 26 (Winter 1971)Google Scholar; Vernon, Raymond, Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (New York: Basic Books, Inc., 1971)Google Scholar; Kindleberger, Charles, ed., The International Corporation: A Symposium (Cambridge, Mass.: The MIT Press, 1970)Google Scholar, and the articles by Bergsten, C. Fred and Nye, Joseph S. Jr, in Foreign Affairs 53, no. 1 (10 1974)CrossRefGoogle Scholar.

15 For an analytical assessment, see Johnson, , and Pincus, John, Trade, Aid and Development: the Rich and Poor Nations (New York: McGraw-Hill, 1967)Google Scholar.

16 Shared values which go well beyond the economic realm are discussed in much of the literature on the Afro-Asian states. See, for example, Jansen, G. H., Non-Alignment and The Afro-Asian States (New York: Frederick A. Praeger, 1966)Google Scholar.

17 Vieuña, Francisco Orrego, “Latin American Policies on the Law of the Sea: The Prospects of a World Compromise Agreement” Paper presented to the Conference on Conflict and Order in Ocean Relations, Airlie House, Airlie, Virginia, 10 21–24, 1974Google Scholar.

18 Gosovic, Branislav, UNCTAD: Conflict and Compromise (Holland: A. W. Sijthoff-Leiden, 1972), p. 272Google Scholar.

19 Ibid., p. 289.

20 Ibid., p. 281.

21 Ibid., pp. 322–3.

22 Brazil is a classic case of a G-77 member which speaks with and for the South publicly while dealing smoothly with the US away from public forums.

23 On the “resource scarcity” issue in general, see Nordhaus, William D., “Resources as a Constraint on Growth,” American Economic Review 64: 22–26 and the literature cited thereinGoogle Scholar, particularly the other works by the same author.

24 One of the best and most succinct analyses remains Knorr's, KlausThe Use of Military Power in the Nuclear Age (Princeton, N.J.: Princeton University Press, 1966)Google Scholar. See also Hoffmann, Stanley, “The Acceptability of Military Force,” Force in Modem Societies: Its Place in International Politics, Adelphi Papers #102 (1973)Google Scholar.

25 For a compelling presentation of the possibility that such Southern perceptions could prove to be either inaccurate (e.g., because of the heightened costs of access to raw materials) or self-defeating (e.g., if egalitarian claims by developing countries lead to modes of behavior which sufficiently antagonize the great powers), see Tucker, Robert W., “A New International Order?” Commentary, 02 1975Google Scholar.

26 For a summary discussion of the OECD findings, see “OPEC Members Lift Aid Outflows to New Peak of Nearly $9 Billion,” IMF Survey, 11 18, 1974, pp. 357 ffGoogle Scholar.

27 This is not to argue that individual Southern states or groups of states–for example, several OPEC members–will not be able to make marked advances without any semblance of Southern solidarity. Indeed, the historical process of economic development has been one which has continually produced new economic powers which sought a place in the international political structure consonant with their emerging economic strength. This essay focuses on the question of southern solidarity in the belief that it will be a crucial variable in determining whether or not any major structural changes are introduced into the political economy of North-South relations which would benefit developing countries across the board, not simply those which have metaphorically “struck oil.”.

28 Keohane, Robert O. and Nye, Joseph S. Jr, “World Politics and the International Economic System” in Bergsten, C. Fred, ed., The Future of the International Economic Order: An Agenda for Research (Lexington, Mass.: D.C. Health and Company, 1973), P. 156Google Scholar. The most outspoken statement of the opposing view can be found in C. Fred Bergsten, “The Threat from the Third World,” Foreign Policy no. 11.

29 Address by Robert S. McNamara to the Board of Governors of the World Bank Group, 1974.

30 The failures have not been due to any lack of paper schemes addressed to the distribution problem, but rather to the lack of political capacity to implement them. See Hansen, Roger D., “Regional Integration: Reflections on a Decade of Theoretical Efforts,” World Politics no. 2, (01 1969): 242–71CrossRefGoogle Scholar.

31 Indeed, the one reason that the Shah might pour substantial funds into India and Pakistan would be intimately related to the continued subtle and not-so-subtle game of regional hierarchy in the Middle East. Venezuela's concentration on Central America, the Carribbean region and the Andean countries seems explicable in similar terms.

32 Given the changes in the structure of international relations, the transnational forces for change and the resulting modifications in the rules of the strategic-diplomatic game, regional hierarchical struggles of the late twentieth century may bear little resemblance to those characterizing the rise of the European state system. Nevertheless, there is little reason to think that they will not take place in one form or another, especially if and as detente politics diminish the importance of much of Asia, Africa and Latin America in the eyes of the US and the USSR. For a stimulating discussion of Brazil's “South American Policy” which demonstrates a blending of the new and the old in regional hegemonial behavior, see Riordan Roett, “The Changing Nature of Latin American International Relations: Geopolitical Realities,” a paper prepared for the Commission on United States-Latin American Relations (forthcoming, Quadrangle Books, 1975).

33 This outcome would be even more likely if the OECD countries arrive at a consensus that invites OPEC cooperation rather than conflict. An OECD-OPEC entente cordiale would tend to limit the prospects for successful Southern attempts at major system change (i.e., structural change); it could at the same time increase the pace of North-South resource transfers within the present framework (i.e., process change). Furthermore, this projection assumes that present North-South conflicts will not become pronounced enough to persuade the OECD countries to attempt an across-the-board “Project Independence” approach vis-à-vis the South.

34 Their first analysis in extended detail appeared in Hoffmann's, StanleyGulliver's Troubles, or the Setting of American Foreign Policy (New York:McGraw-Hill, 1968)Google Scholar where he probed the possibilities for dissension within the ranks of the world's industrialized countries in his discussion of the themes of muted bipolarity, polycentrism and multipolarity. Many further works, particularly Cooper's, RichardThe Economics of Interdependence (New York: McGraw-Hill, 1968)Google Scholar, and Keohane, Robert O. and Nye, Joseph S. Jr, eds., Transnational Relations and World Politics, International Organization 25, no. 3, (Summer 1971)Google Scholar spoke directly and indirectly to the structural changes in international relations and the transnational forces for change which inherently entailed increasing difficulties for the degree of Northern (or OECD, or industrialized country) cohesion which had existed during the 1950s and early 1960s.

35 These two bilateral accords still appear to be devoid of much substance. This is probably due to the very uncertainty of events and trends in the present international atmosphere. If there is to be a system-change such as that projected in this paragraph, however, one would expect to see such accords move from the paper to the implementation stage.

36 As noted in footnote 27 above, major international political changes will occur even if Southern solidarity fails simply because the successful OPEC price actions are now producing a new group of middle-range powers. The question at issue here is whether such changes will be limited to the OPEC countries, or in part extended to a much larger group of developing countries via major changes in the rules of the present international economic system.

37 Middle East arms purchases from the US alone are currently running at $4 billion per year, and Iran has twelve nuclear power plants on order from the US, France, and West Germany.