This paper documents industrial output growth around the poor periphery (Latin America, the European periphery, the Middle East and North Africa, Asia, and sub-Saharan Africa) between 1870 and 2007. We find that although the roots of rapid peripheral industrialization stretch into the late 19th century, the high point of peripheral industrialization was the 1950–1973 period, which saw widespread import-substituting industrialization. This period was also the high point of unconditional industrial catching up, defined as the tendency of less industrialized countries to post higher per capita manufacturing growth rates, and which occurred between 1920 and 1990.
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As will become clear below, we use manufacturing data whenever possible, but in some cases are obliged to use industrial growth rates instead.
Indeed, since these are per capita rather than per worker growth rates, they also reflect changes in the labour force participation rate.
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We exclude countries with only two or three data points in a period, since we could not meaningfully estimate growth rates for these. In an earlier draft, we used all available observations, which increased the sample sizes somewhat, but the results were the same.
These five periphery regions certainly deserved the label “poor”. In 1913, their per capita incomes relative to the three leaders (100) were: Eastern Europe 34.4 and Southern Europe 42.3; Latin America 32.3; Middle East 22.5; Asia 16.3; and Sub-Saharan Africa 13.8 (Maddison 2010).
Details are given in Table 12.
As noted, the Middle East and North Africa sample is represented by Turkey alone.
The one exception to this statement being Latin America after 1990 which posted a growth rate equal to that in the UK, US and Japan.
This suggests, of course, that population and domestic market size might have been an important determinant of industrial performance between 1913 and 1973, a long anti-global episode. We intend to pursue this, and other possible determinants, in subsequent work.
Table 3, in contrast, ranked countries according to how early they joined the modern growth club, which was defined in terms of growth performance over just ten years.
Economists have only found evidence of conditional convergence (Durlauf, Johnson and Temple 2005).
Assuming constant labour participation rates. Manufacturing output per capita, Qm/P, is equal to (Qm/Lm)(Lm/L) (L/P), where Qm is manufacturing output, P is population, Lm is employment in manufacturing, and L is total employment. Poor periphery manufacturing typically meant low productivity, small scale and labour-intensive manufacturing compared with the leaders. Therefore the onset of modern industrialization should have led to convergence in (Qm/Lm). Compared with the leaders, the followers were likely to undergo a demographic transition during their industrial take off, thus raising (with a lag) L/P, and thus raising the growth of Qm/P. See Bloom and Williamson 1998; Bloom and Canning 2001; Lee and Mason 2010. Finally, Lm/L rises over time during industrial revolutions (see for example Crafts 1985).
For our six periods, the coefficients are estimated using data for 20, 23, 29, 40, 70 and 146 countries respectively. For the final two periods, this column uses benchmark data from the World Development Indicators.
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The research leading to these results has received funding from the European Research Council under the European Union's Seventh Framework Programme (FP7/2007-2013)/ERC grant agreement no. 249546. For help with collecting the data, we are grateful to Alberto Baffigi, Ivan Berend, Luis Bértola, Steve Broadberry, Albert Carreras, Myung So Cha, Roberto Cortés Conde, Alan de Bromhead, Niamh Devitt, Rafa Dobado, Giovanni Federico, David Greasley, Ola Grytten, Gregg Huff, Elise Huillery, Martin Ivanov, Isao Kamata, Duol Kim, John Komlos, Toru Kubo, Pedro Lains, John Lampe, Sibylle Lehmann, Carol Leonard, Debin Ma, Graciela Marquéz, Matthias Morys, Aldo Musacchio, Noel Maurer, Ian McLean, Branko Milanovic, Steve Morgan, José Antonio Ocampo, Roger Owen, Les Oxley, Şevket Pamuk, Dwight Perkins, Guido Porto, Leandro Prados de la Escosura, Tom Rawski, Jim Robinson, Max Schulze, Martin Shanahan, Alan Taylor, Pierre van der Eng, Ulrich Woitek, and Vera Zamagni. We are also grateful for the comments from Michael Clemens, and participants at the UW Development Seminar (May 10 2012), the Trade and History conference (Madrid May 17, 2012), the WEHC session on Industrialization (Stellenbosch July 11 2012), and the Arndt-Corden Seminar (ANU December 11 2012). The usual disclaimer applies.
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Bénétrix, A.S., O’Rourke, K.H. & Williamson, J.G. The Spread of Manufacturing to the Poor Periphery 1870–2007. Open Econ Rev 26, 1–37 (2015). https://doi.org/10.1007/s11079-014-9324-x
- Third world industrialization