The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies

Jeffrey G. Williamson

NBER Working Paper No. 7146
Issued in May 1999
NBER Program(s):   ITI   EFG   DAE

This paper uses a new pre-1940 Third World data base documenting real wages and relative factor prices to explore their determinants. There are three possibilities: external price shocks, factor endowment changes, and technological change. As the paper's title suggests, technological change is an unlikely explanation. The paper lays out an explicit econometric agenda for the future, although more casual empiricism suggests that external price shocks were doing most of the work, and declining-transport-cost-induced commodity price convergence in particular. Real wages in Asia, the Middle East, and Latin America never showed any signs of catching up with the European industrial leaders prior to 1914 hold their own. The ratio of wages to land rents, on the other hand, declined up to World War I and so did the ratio of wages to GDP per capita. The trend reversed thereafter. These relative factor price movements help sharpen our understanding of the sources of growth (or lack of it) in Asia and Latin America prior to 1940. They also offer strong hints about changes in income distribution there.

download in pdf format
   (386 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7146

Published: as "Land, Labor, and Globalization in the Third World, 1870-1940" The Journal of Economic History, Vol. 62, No. 1, Mar., 2002

Users who downloaded this paper also downloaded* these:
Williamson h0115 The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies
Duflo w8061 Grandmothers and Granddaughters: Old Age Pension and Intra-household Allocation in South Africa
Case and Deaton w5572 Large Cash Transfers to the Elderly in South Africa
Hamoudi and Thomas w19929 Endogenous Co-residence and Program Incidence: South Africa's Old Age Pension
Ferraz and Finan w14937 Electoral Accountability and Corruption: Evidence from the Audits of Local Governments
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us