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Final Paper

Final Paper - Jared Augenstein International Politics...

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Jared Augenstein International Politics Professor Haus Final Paper Are Developing States Helped or Hurt by Participation in the Global Economy? In 1960, the total income of the richest 20 percent of the world’s population was 30 times that of the world’s poorest 20 percent. By 1998, the income of the top 20 percent had swelled to 82 times that of the poorest 20 percent (Lairson, Skidmore 239). This statistic is an excellent representation of the current economic divide between the North and the South; the rich are getting richer at an exponential pace while the poor are struggling to survive. This trend follows the paradigm that the strong do what they will while the weak suffer what they must. Certain developing countries choose to participate in global economy, while others choose to avoid it; most countries however, have adopted a policy of selective participation. The issue at hand is not whether developing countries choose to participate in global economy but rather, whether Southern countries, or people from Southern countries, benefit from economic ties and interaction with the North and from participation in global economic institutions. In order to analyze this complex question we must dissect the different levels of the global economy and examine previous issues and case studies encountered by Southern countries participating in the global economy. Obviously there is no clear answer to this question and while some developing countries may benefit from participation in the global economy, others may suffer greatly. Unfortunately, I believe that whether participation is beneficial or not, doesn’t matter because it is necessary for developing nations to participate in global economy. I will attempt to address this issue by analyzing specific areas of the global
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economy such as immigration, trade, labor, environmental issues, and the World Trade Organization. Raúl Prebisch was an Argentine economist who formed the basis of the economic dependency theory. He believed that in order for developing countries to strive in the global economy they needed to do three things: First, they need to put up trade barriers to protect their industries from international competition. Second they need to build up their industries until they are ready to compete on a global scale. Finally they take down these trade barriers when their industries have grown and they are able to compete on the global scale. Prebisch’s theory, unfortunately, had one major flaw; once these developing countries removed their trade barriers, the developed nations, which the goods were intended for, put into action their own trade barriers on these goods. Furthermore, these developing nations could not sell the goods in their own nations because the middle class in these nations was extremely small, ergo, there was no large population of people to sell the goods to.
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