Page 131 - Global Political Economy_Understanding The International Economic Order

CHA PTER F IVE
tration ofmanufacturing and many other economic activities in par-
ticular locations. 32
The persistence ofregional concentrations ofeconomic activities or
the core/periphery model ofthe structure of an economy has long been
ofgreat interest to Marxists, dependency theorists, and other scholars
on the political left who attribute the core/periphery structure to capi-
talist imperialism and exploitation. While some conservative scholars
have acknowledged the prevalence ofthe core/periphery structure, they
have been unable to provide, or have been uninterested in providing,
a satisfactory economic explanation of the universal tendency toward
economic agglomeration. Although economic geographers have long
been interested in the spatial organization ofeconomic activities, their
theories have unfortunately been ignored by economists and have not
been incorporated into economics nor sufficiently integrated within the
political economy literature. In the late twentieth century, some econo-
mists did attempt to explain the core/periphery structure ofthe econ-
omy through the new economic geography. Their explanation has con-
siderable relevance for the study of IPE. 33
According to NEG, the initial location and concentration ofeco-
nomic activities in a particular region is frequently a matter of mere
chance or historical accident. However, once an industry or economic
activity is established, cumulative forces and feedback mechanisms
can lead to continued concentration ofeconomic activities in that
region for an extended period of time. Self-reinforcing processes mean
that the evolution ofa regional economy and its structure are largely
determined by what Brian Arthur and Paul David have labeled the
34
phenomenon ofpath dependence. According to this simple but pow-
erful idea, the historical past and cumulative processes largely deter-
32
Most geographers undoubtedly characterize the new economic geography as the
rediscovery ofthe wheel. Much that Krugman and others have written has already
appeared in the literature ofgeography and is another example ofthe failure ofecono-
mists to explore what historians and other social scientists have written. A valuable
critique ofthe new economic geography by a geographer is Ron Martin, “The New
‘Geographical’ Turn in Economics,” Cambridge Journal of Economics 23, no. 1 (Janu-
ary 1999): 65–91. A commentary on the slighting ofgeography by Krugman appears
in The Economist, 13 March 1999, 92.
33
The literature on core/periphery economic structures is extensive. A useful survey
is in Arie Shachar and Sture Oberg, eds., The World Economy and the Spatial Organi-
zation of Power (Aldershot, U.K.: Avebury 1990).
34
An important discussion of path dependence is in W. Brian Arthur, “Self-Reinforc-
ing Mechanisms in Economics,” in Philip W. Anderson, Kenneth J. Arrow, and David
Pines, eds., The Economy as an Evolving Complex System: The Proceedings of the
Evolutionary Paths of the Global Workshop (published for the Sante Fe Institute, Stud-
ies in the Sciences ofComplexity, 1988), Vol. 5.
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