Resource-Led Growth - A Long-Term Perspective
The Relevance of the 1870-1914 Experience for Today's Developing Economies
Resource-Led Growth - A Long-Term Perspective surveys the 1870-1914 experience of growth in resource-rich economies: the so-called regions of recent settlement, some tropical countries and some mineral-based export economies. First, three contrasting stylized views of resource-led development are presented. Thereafter the picture of international trade in primary products and the migration of production factors between 1870 and 1914 is sketched. The third section presents some models that may be used to analyse trade and factor movements in the context of resource-rich (staples) economies and provides some details of the experience of fifteen countries: Canada, the United States, Australia and Argentina among the regions of recent settlement, Brazil, Costa Rica, Colombia, Ceylon, Malaya, Burma, Siam and the Gold Coast in the tropical group, and Bolivia, Chile and South Africa among the mineral exporters.The essay concludes that the economies surveyed differ in their experiences, with the regions of recent settlement doing relatively better than the rest, among other things because their relatively larger per capita natural endowments made for higher per capita incomes and larger internal markets conducive to industrialization. It is also argued that the relevance of the 1870-1914 experience for today's developing countries is limited, because the characteristics of the world economy during the former period differ substantially from those of today and because it may be comparatively speaking more difficult for resource-rich countries to industrialize today than under circumstances resembling those of the 1870-1914 period. This problem is further compounded by a series of faulty policy choices in the past.