INTERNATIONAL ECONOMIC DEVELOPMENT
International development through the decades
The 1970s
Structural change and Global North–South Dialogue
In the early 1970s, the world of economic development still carried many of the legacies of the post-World War II era. Trade and reconstruction models were well established for Europe and Japan, but the developing world was increasingly voicing concern that the “old” international economic order was stacked against poorer countries. For example the Declaration on the Establishment of a New International Economic Order in 1974 sought a more equitable distribution of global income and resources. Simultaneously, trade liberalization was only just getting traction and many developing countries still adopted import-substitution industrialization or state-led strategies. Policy thinking was also shifting, with the rise of changing structural frameworks. The emphasis was on state intervention and structural transformation of industry, infrastructure and state-led investment. Government planners were focused on how to move economies from agriculture to industry, build infrastructure, mobilize domestic savings and restructure debt. Major institutions such as the United Nations Conference on Trade and Development (UNCTAD), established in 1964, were influential in shaping the agenda of the Global South. According to UNCTAD, the term refers to countries with developing economies, mostly in Africa, Asia, Latin America and the Caribbean. These countries are generally characterized by lower incomes, higher poverty rates and developing infrastructure compared to the North. A landmark was the Brandt Report (1980) written by a commission chaired by the former Chancellor of West Germany (1969-74), Willy Brandt, which advocated for large transfers from rich to poor countries to bridge the North- South divide. This era saw an increasing role for development assistance and
Establishment of the New International Order, UN, 1974
“Government planners were focused on how to move economies infrastructure, mobilize domestic savings and restructure debt.” from agriculture to industry, build infrastructure, mobilize domestic savings and restructure debt. from agriculture to industry, build Government planners were focused on how to move economies
concessional flows, as well as early debates regarding debt in developing countries. However, many developing countries still faced low productivity, weak institutions, limited infrastructure and large external debt burdens, all key challenges that the new thinking ultimately failed to turn around.
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