Abstract
All told there are now 182 countries in the world, and membership of the United Nations stands at 150, but only 125 countries which have a minimum of 1 million population are regularly included in ‘official’ (that is, World Bank, OECD and UN sponsored) world development statistics. And when it comes to statistical comparisons involving more detailed social and economic data, the number of countries included is usually smaller still, between sixty and eighty.
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Notes and References
Part of the problem arises from the fact that official exchange rates (on which GNP and GDP calculations are based) do not measure relative domestic purchasing power because a large portion of marketed GNP does not enter into world trade. This problem was first discussed in a seminal paper in 1954 by M. Gilbert and I. Kravis in An International Comparison of National Products and the Purchasing Power of Currencies (Paris: OECD, 1954). Since then Kravis and his team, now working for the World Bank, have tried to improve the measure of international comparisons of GDP. Their calculations involve direct binary comparisons of physical quantities for sixteen selected countries ranging from the USA to India and Kenya and crude interpolations using these countries as a yardstick.
See I. Kravis et al., A System of International Comparison of Real Product and Purchasing Power (Washington: IBRD-UN, 1975); I. Kravis, A. W. Heston and R. Summers, ‘Real GDP Per Capita for More than One Hundred Countries’, Economic Journal, June 1978
I. Kravis et al., International Comparisons of Real Product and Purchasing Power (Baltimore: Johns Hopkins Press, 1978).
More seriously, the GNP calculations of course do not measure income distribution. GNP per capita is a statistical average which in view of the enormously unequal income distributions especially characteristic of developing countries cannot strictly speaking be acceptable as a statistical measure of a central tendency. Efforts to complement GNP measures with indexes of ‘levels of living’ and of ‘levels of welfare’ which do include a distributional component have none the less come up with the surprising finding that there is after all a close correlation between such levels of living indexes and GNP per capita; cf. Jan Drenowski and Wolf Scott, The Level of Living Index (Geneva: UNRISD, 1966).
See also the comment made by Bill Warren, Imperialism, Pioneer of Capitalism (London: New Left Books, 1980) pp. 224ff. More recent data on basic needs performance, which may be argued to have (indirectly) a distributional component, also suggest a close correlation between the monetary GNP per capita and the substantive indicators of welfare and well-being.
See Glen Sheenan and Mike Hopkins, Basic Needs Performance: an Analysis of Some International Data (Geneva: ILO, 1979).
R. McNamara, Address to the Governors (Washington: IBRD, 1980) p. 35.
Lester B. Pearson et al., Partners in Development: Report of the Commission on International Development (London: Pall Mall Press, 1970) p. 29.
UNCTAD Document TD/B/288 (Geneva: UNCTAD, 1970). This was the report of the first group of experts convened by UNCTAD II in 1968. This report was the first to identify the ‘least developed country’ category.
Committee for Development Planning, Report on the Seventh Session 1971, Document E/4990 (New York: United Nations, 1971). The Committee, acting upon the recommendations of the first group of experts (see note 6 above), laid down the criteria for identifying least developed countries. At first, the list of criteria contained some eight items. These were next simplified to three on the argument that ‘arbitrary though it was, the distinction and its simplified method was necessary if a concrete expression was to be given to the political will to implement special measures in their favour’.
Cf. G. K. Helleiner, ‘Structural Aspects of Third World Trade, Some Trends and Some Prospects’, Paper submitted at the 25th Anniversary Conference 16–20 December 1977, The Hague, Institute of Social Studies, p. 2.
The notion that successful economic development in developing countries is closely associated with the degree of their integration into patterns of world trade and international capital movements (in short, the world economy) has long since been the conventional wisdom of the World Bank. The notion was empirically verified in a study by H. Chenery (Vice-president) and M. Syrguin, Patterns of Development, 1950–1970 (Oxford University Press, 1975).
Cf. Warren, Imperialism, Pioneer of Capitalism, p. 198. See also Lars Anell and Birgitta Nygaren, The Developing Countries and the World Economic Order (London: Francis Pinter (Publisher) Ltd, 1980).
Keith Griffin and A. R. Khan, Poverty and Landlessness in Rural Asia (Geneva: ILO, 1977). This widely quoted ILO study showed that for a large number of developing countries recent growth has been accompanied by an increase in the absolute poverty of the bottom 20 to 40 per cent of the population.
Cf. Stephen Hellinger and Douglas A. Hellinger, Unemployment and the Multinationals (New York: Kennekat Press, 1976) esp. chs 1 and 2. The authors estimate that by 1967, in Latin America as a whole, industry was absorbing only 31 per cent of the total non-agricultural labour force as compared with 35 per cent in 1950.
This point was made by ex-president of the World Bank, Mr R. McNamara in his address to UNCTAD II, Santiago, Chile, on 14 April 1972. McNamara told delegates that after ten years of the Brazilian miracle the share of national income received by the bottom 40 per cent of the population had declined from 10 to 8 per cent while that of the top 5 per cent had risen from 29 to 38 per cent. Quoted in Orlando Letelier and Michael Moffit, The International Economic Order, Part I (Amsterdam: Transnational Institute, 1977) p. 52.
Fishlow estimates that 50 per cent of the Brazilian population lives below a poverty line of 75 dollars per annum. See A. Fishlow, ‘Equity in North-South Relations’, in A. Fishlow et al., Rich and Poor Nations in the World Economy (New York: McGraw-Hill, 1978).
For the 80 per cent estimate see Th. Dos Santos, ‘The Crisis of the Brazilian Miracle’, mimeograph (Toronto: Latin American Research Unit, 1977). Dos Santos here quotes the Brazilian demographic census as saying that 80 per cent of the population in Brazil barely achieves minimal survival levels, and furthermore that it has decreased its already low share of GNP from 45.5 per cent in 1960 to 36.8 per cent in 1970.
M. Ahluwalia, ‘Income Inequality’, in Hollis Chenery et al., Redistribution with Growth (Oxford University Press, 1974) pp. 13ff.
S. Kuznets, ‘Economic Growth and Income Inequality’, American Economic Review, 45, no. 1, 1955, pp. 1–28.
See also S. Kuznets, ‘Quantitative aspects of Economic Growth of Nations III: Distribution of Income by Size’, Economic Development and Cultural Change, 11, January 1963, pp. 1–80.
R. McNamara, Address to the Massachusetts Institute of Technology (Cambridge, Mass.: 28 April 1977) p. 35.
The World Bank’s shift from ‘bottom line to bottom billion’ thinking may be officially dated with the publication of the then president’s book in which he outlines and advocates the new policy: R. McNamara, One Hundred Countries, Two Billion People: the Dimensions of Development (London: Pall Mall Press, 1973).
For a thorough and critical review of the reorientation of the World Bank’s ideology and its lending policies, see Aart v.d. Laar, ‘The World Bank and the Poor’, thesis, (Amsterdam: Vrije Universiteit, 1979).
R. R. Fagen, ‘Equity in the South in the Context of North-South Relations’, in Fishlow et al., Rich and Poor Nations in the World Economy, p. 175. Another, equally vague definition of absolute poverty is also current in circles of international organisations, namely ‘absolute poverty — as a condition of life so limited by malnutrition, illiteracy, disease, high infant mortality and low life expectancy as to be below any rational definition of human decency’: R. McNamara, Address to the Board of Governors (Belgrade, Yugoslavia: 2 October 1979) p. 19.
Exactly the same definition appears in J. Tinbergen et al., Reshaping the International Order, Second Report to the Club of Rome (New York: Dutton, 1976) p. 66.
Cf. McNamara, Address to the Board of Governors, p. 19; and R. McNamara, Address to the University of Chicago, 22 May 1979, p. 4. The one billion figure for people living in absolute poverty is also used in the Brandt Report: North-South: A Programme for Survival, Report of the Independent Commission on International Development Issues under the Chairmanship of Willy Brandt (London: Pan Books, 1980).
OECD, Economic Outlook (Paris: OECD, 1980) p. 121.
Bank for International Settlements, 50th Annual Report (Basle: BIS, 1980) pp. 84–5.
Cf. Marilyn Seiber, ‘Debt Escalation: Developing Countries in the Euro-currency markets’, in L. G. Franko and M. J. Seiber, Developing Country Debt (Oxford: Pergamon Press, 1979) p. 44.
World Bank, Annual Report 1980 (Washington: IBRD, 1980) p. 90.
E. Mandel, The Second Slump (London: New Left Books-Verso, 1980) p. 69. See also Payer, ‘Third World Debt Problems’.
The term ‘world market factory’ is coined by Folker Fröbel, Jürgen Heinrichs and Otto Kreye, The New International Division of Labour (Cambridge University Press, 1980) p. 6.
H. Schwamm and D. Germidis, Codes of Conduct for Multinational Companies: Issues and Positions (Brussels: ECSIM, 1977) p. 25.
UN ECOSOC, Multinational Companies in World Development (New York: United Nations, 1973) p. 14. See the footnote to that page for an explanation of how estimates of international production are obtained.
UN ECOSOC, Transnational Corporations in World Development: A Re-examination (New York: United Nations, 1978) p. 35. See footnote to that page for an explanation of the variations in calculations of ‘international production’ between the 1973 and the 1978 reports.
For the 1960 figure (United Kingdom plus the USA) see M. Barratt Brown, The Economics of Imperialism (Harmondsworth: Penguin, 1974) pp. 206, 207.
For 1966, see Lester B. Pearson, Partners in Development (London: Pall Mall Press, 1970) p. 100. For 1974, see Transnational Corporations in World Development, table III, 38, p. 242.
See H. Magdoff, The Age of Imperialism (New York: Monthly Review Press, 1966) pp. 50–1. Magdoff makes the point that with the advent of the jet engine, the gas turbine and nuclear reactors, the USA has become more dependent than before on imports of critical materials.
A similar position is taken by Pierre Jalee, Imperialism in the Seventies (New York: The Third Press, 1972).
Lester Brown, World Without Borders (New York: Random House, 1973), estimates that by the end of the century the USA would be dependent on imports for half or more of its supplies of all basic industrial raw materials except phosphate, as compared with a similar import dependence only for aluminium, manganese, nickel and tin in 1950, and these four and zinc and chromium in 1970 (quoted in Fishlow et al., Rich and Poor Nations in the World Economy, p. 33).
W. Arad and U. B. Arad, Sharing Global Resources (New York: McGraw-Hill, 1979) p. 42.
G. Adams, ‘New Trends in International Business’, Acta Oeconomica, vol. 7, nos 3–4, 1971, pp. 349–67. Adams says that it is something of a ‘truism’ that competitive exports from less developed countries in manufactured goods are already to a ‘significant’ extent accounted for by the international companies.
And Werner J. Feld, Multinational Corporations and UN Politics: the Quest for Codes of Conduct (Oxford: Pergamon Press, 1980), comments that while Brazil, Mexico, India, Malaysia and the tax havens increased their share of foreign investments appreciably in the period 1967–71, that of other less developed countries, including OPEC, declined (cf. p. 10).
The 1974 UN programme of action on the establishment of a New International Economic Order (see Chapter 2) includes the desirability of such a code of conduct as one of its main programme points. On the various draft codes, see Dieter Ernst, ‘A Code of Conduct for the Transfer of Technology: Establishing New Rules or Codifying the Status Quo?’, in K. Sauvant and H. Hasenpflug, The New International Economic Order (Boulder, Col.: Westview Press, 1977) pp. 297–314. The need to review and revise the international patent system is the subject of UNCTAD Resolution TAD/RES/88(IV), 30 May 1976.
For a discussion see Constantine V. Vaitsos, ‘The Revision of the International Patent System: Legal Considerations for a Third World Position’, World Development, vol. 4, no. 2, 1976, pp. 85–102.
Cf., for instance, the progress made in this respect by the Andean Pact countries which have already passed novel industrial property legislation. See Commission of the Acuerdo de Cartagena, ‘Common Treatment of Foreign Capital, Trademarks, Patents, Licensing Agreements and Royalties in the Andean Common Market’, Journal of Common Market Studies, vol. 10, 1972, pp. 339–59.
See Ernst, ‘A Code of Conduct for the Transfer of Technology’. Some empirical evidence of the development of technology-embodied restrictions in response to progressive host government legislation was collected by this author in Nigeria: see Ankie Hoogvelt, ‘Indigenization and Technological Dependency’, Development and Change, vol. 11, 1980, pp. 257–72.
C. V. Vaitsos, ‘Bargaining and the Distribution of Returns in the Purchase of Technology by Developing Countries’, Bulletin of the Institute of Development Studies, vol. 3, no. 1, 1970, pp. 16–23.
Cf. R. Murray, ‘Underdevelopment, International Firms and the International Division of Labour’, in Towards a New World Economy, Papers and Proceedings of the Fifth European Conference of the Society for International Development, The Hague (Rotterdam University Press, 1972) esp. pp. 226–7, which list the monopolistic restrictions that might apply in this area.
See also S. Sideri and S. Johns, Mining for Development in the Third World (Oxford: Pergamon Press, 1980).
J. D’Arista, ‘US Banks Abroad’, in United States Congress, House Committee on Banking, Currency and Housing, FINE: Financial Institutions and the Economy (Washington, US Government Printing Office, 1976) book II, p. 850, quoted in Transnational Corporations in the World Economy, p. 49.
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© 1982 Ankie M. M. Hoogvelt
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Hoogvelt, A.M.M. (1982). The Changing World Economy. In: The Third World in Global Development. The Sociology of Developing Societies. Palgrave, London. https://doi.org/10.1007/978-1-349-16777-7_2
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