National and Regional Patterns of Convergence and Divergence
Edited by John Adams and Francesco Pigliaru
Chapter 2: Does sovereignty matter for economis growth? An analysis of growth rates between 1870 and 1950
Page 46 2. Does sovereignty matter for economic growth? An analysis of growth rates between 1870 and 1950 M. Shahid Alam INTRODUCTION* This chapter explores the connections between sovereignty and the growth record of lagging countries over the two centuries leading up to the 1950s. It combines theory and empirics to show that sovereignty was a powerful force driving the polarization of the global economy during this period. The first phase of the industrial epoch ending in the 1950s was characterized by (i) international integration of markets, (ii) concentration of manufactures in a small number of advanced countries, (iii) rising global disparities and (iv) centralization of power in the advanced countries.1 Although these stylized facts are not controversial, not all of them are acknowledged by orthodox or dissenting accounts of the global economy. Orthodox analyses of the global economy accommodate only the first and second stylized facts; their prediction that integration will lead to all round growth being at variance with the third. Dissenting economists incorporate the first, second and third stylized facts but leave out the fourth; they generally claim that rising disparities were caused by integration of markets. This chapter takes explicit account of all four stylized facts. It argues that the patterns of global integration and growth during phase one of the industrial epoch were intimately connected to the spatial concentration of manufactures and power. When two economies at unequal levels of development were freely integrated, they moved further apart in terms of levels of development. Sovereign...
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