 No drain, no gain? The problems with unequal exchangeNiall Reddy and Virgilio Urbina Lazardi No stwcj_v1, SocArXiv from Center for Open Science Abstract: Recent empirical work (Hickel et al. 2021, 2022) appears to show that the Global South is being ``drained" of resources and value on a vast scale through unequal exchange (UE) and/or ecologically unequal exchange (EUE). Headline estimates of the aggregate value of this extraction have been widely taken to substantiate two politico-normative issues: that the South is systematically exploited through international price formation, and that this drain constitutes a binding constraint on Southern development and a precondition for Northern prosperity. This paper argues that neither claim is supported by the new measurement agenda. It shows that new drain estimates rely on untenable premises -- in particular, claims of North-South parity in productivity and export composition. Stipped of these assumptions, Hickel et al's method can't yield a counterfactual ``fair price" vector, meaning that their estimates are ungrounded and indeterminate. Moreover, even granting the estimates, they do not sustain an underdevelopment thesis. In standard growth regressions and long-run club-convergence tests, higher measured drain is non-negative and often positively associated with Southern growth once conventional fundamentals are controlled for. The paper suggests ways that research in ecological economics can be placed on a firmer conceptual footing. Date: 2026-01-13 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:stwcj_v1 Access Statistics for this paper More papers in SocArXiv from Center for Open Science |
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