Industrial Catching Up in the Poor Periphery 1870-1975

Jeffrey G. Williamson

No 8335, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper documents industrial output and labor productivity growth around the poor periphery 1870-1975 (Latin America, the European periphery, the Middle East, South Asia, Southeast Asia and East Asia). Intensive and extensive industrial growth accelerated there over this critical century. The precocious poor periphery leaders underwent a surge and more poor countries joined their club. Furthermore, by the interwar the majority were catching up on Germany, the US and the UK, a process that accelerated even more up to 1950-1975. What explains the spread of the industrial revolution world-wide and this catching up? Productivity growth certainly made their industries more competitive in home and foreign markets, but other forces mattered as well. A falling terms of trade raised the relative price of manufactures in domestic markets, as did real exchange rate depreciation. In addition, increasingly cheap fuel and non-fuel intermediates from globally integrating markets seems to have taken resource advantages away from the European and North American leaders, and integrating world financial markets also reduced the cheap capital advantage of the leaders. However, ever-cheaper labor was not a serious cause of industrial catch up, offering little support for the Krugman-Venables (1995) model. Furthermore, tariffs did not foster industrial catch up either, but rather poor industry performance fostered high tariffs. Markets and policies mattered, not just institutions.

Keywords: Early third world industrialization; World markets; Trade policy; Input costs; Productivity; History (search for similar items in EconPapers)
JEL-codes: F1 N7 O2 (search for similar items in EconPapers)
Date: 2011-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://cepr.org/publications/DP8335 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8335

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8335

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().