The Rise and Fall of the Global South Prabhat Patnaik

A picture that was painted of globalization went as follows: the real wages in the south are much lower than in the north, since the south is saddled with large labour reserves. In a world where capital is mobile, even if labour is not, capital from the north will shift the location of its production activity from the north to the south, to take advantage of these low wages, for meeting global demand. Even if capital from the north does not move to the south, local capitalists in the south who have access (or can obtain access) to frontier production…

The Growth cum Foreign Savings Strategy and the Brazilian Economy since the early 1990s Luiz Carlos Bresser-Pereira

Using the theory of the Second Washington Consensus, based on the opening of the financial accounts and the growth cum foreign savings strategy, this paper explains why even after the Real Plan of 1994, the Brazilian economy remained quasi-stagnant with soaring debts and two balance of payments crises. The paper discusses the conditions under which foreign savings are or are not favorable to growth, and argues that if a country is already indebted externally, and does not count with a cluster of profitable investment projects, capital inflows will just overvalue the exchange rate, increase artificially real wages, and cause increased…

How Did the West Get Rich? Alternative Stories and Alternative Lessons Luiz Carlos Bresser-Pereira

(Prepared as a bases for remarks delivered at the panel on "The New Development Economics: Critical Perspectives," at the Left Forum, New York, March 11, 2006.) The new development economics – and, more generally, the neo-liberal approach to economics – is based on certain ideas about markets and private property, in particular the idea that when property rights are secure and markets are allowed to function economic growth will be the salutary result. The condition that "markets are allowed to function" includes international markets, and an advocacy of free trade is certainly one of the hallmarks of the new development…

European Integration, Innovations and Uneven Economic Growth: Challenges and problems of EU 2005 Erik. S. Reinert

This paper provides three parallel and complimentary explanations about the creation of the currently evident tensions within the European Union. In the context of the integration process, the explanations are given in terms of: ‘the deviation from successful principles of the past’, ‘the theoretical framework’ which prevents sufficient discussion of the qualitatively differential impact of innovation, and a deficient ‘wider context of innovation’ characterized by the lack of a broader cultural and societal context. european_integration (Download the full text in PDF format)

From Liberalization to Investment and Jobs: Lost in tsssranslation Yilmaz Akyüz

This paper discusses the experience of late industrializers in harnessing profits through industrial-cum-investment policies for faster accumulation. It is found that the performance of a large number of developing countries which have adopted a strategy of reigniting a dynamic process of capital accumulation and growth through a combination of rapid liberalization, increased reliance on foreign capital and reduced public investment and policy intervention is highly disappointing. The paper also examines the impact of macroeconomic and financial policies on accumulation, employment and growth, and concludes with a discussion of policy priorities. lost_translation (Download the full text in PDF format)

Development and Social Goals: Balancing aid and development to prevent ‘welfare colonialism’ Erik S. Reinert

The Millennium Goals are far too much biased towards palliative economics rather than structural change, towards treating the symptoms of poverty rather than its causes.  An alternative perspective for cohesive development emerging from the historical and evolutionary approach recommends increasing diversification away from the diminishing returns sectors (traditional raw materials and agriculture) into an increasing returns sector (technology intensive manufacturing) and a  creating a large division of labour and the synergies and social structures which emerge from this structure. welfare_colonialism (Download the full text in PDF format)

Ten years of NAFTA Jayati Ghosh

The first day of this year marked the tenth anniversary of NAFTA – the North American Free Trade Agreement, which brought the economies of the United States, Canada and Mexico together. This was a trade deal preceded by much debate and opposition, but ultimately pushed through with enthusiastic support from the large corporations of the US, some would say even written by them. But the decade's experience suggests that it is mainly these corporations that have benefited, while almost all of the other promises of the agreement's supporters have turned sour. NAFTA was an ambitious agreement in some respects, bringing…

Increasing Poverty in a Globalised World: Marshall plans and morgenthau plans as mechanisms of polarisation of world incomes Erik S. Reinert

The increasingly globalised economy seems to produce opposite effects of what standard economic theory predicts. Instead of a convergence of world income (towards factor-price equalisation), a group of rich nations show a tendency to converge, another convergence group of poor countries gathers at the bottom of the scale. This paper explains the mechanisms and the economic policies that create this type of gap in the living standard of workers in the non-tradable service sector. globalised_world (Download the full text in PDF format)

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