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Industrial Catching Up in the Poor Periphery 1870-1975

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  • Williamson, Jeffrey G

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.

Suggested Citation

  • Williamson, Jeffrey G, 2011. "Industrial Catching Up in the Poor Periphery 1870-1975," CEPR Discussion Papers 8335, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8335
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    References listed on IDEAS

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    1. repec:gam:jsusta:v:10:y:2018:i:4:p:965-:d:138129 is not listed on IDEAS
    2. Marc Badia-Miró & Cristián A. Ducoing, 2014. "The long run development of Chile and the Natural Resources curse. Linkages, policy and growth, 1850-1950," UB Economics Working Papers 2014/318, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
    3. Felice, Emanuele & Carreras, Albert, 2012. "When did modernization begin? Italy's industrial growth reconsidered in light of new value-added series, 1911–1951," Explorations in Economic History, Elsevier, vol. 49(4), pages 443-460.

    More about this item

    Keywords

    Early Third World industrialization; history; input costs; productivity; trade policy; world markets;

    JEL classification:

    • F1 - International Economics - - Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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