Development Theory and Globalization, the First Wave: A Reinterpretation

66 Pages Posted: 9 Jun 2014 Last revised: 31 Mar 2019

See all articles by Abel M. Mateus

Abel M. Mateus

University College of London (UCL)

Date Written: December 30, 2013

Abstract

The first wave of globalization, commonly dated from 1870 to 1913, was not only a more gradual phenomenon throughout the 19th century, but closely related with the emergence of most the Western European Offshoots as developed economies. The massive transfer of human capital and transplant of European institutions to the Offshoots is a natural experiment of the relevance of those factors to economic growth-cum-globalization, which has been overlooked by the literature. The rise of the US as a leading industrial economy and its role in international trade proves how important are these factors in the so called transplant economies. Simultaneously, there was a large expansion (about a third) in the world production possibility set due to the land and natural resources coopted into the world economy, as well as one of the highest rates of world technological progress. Another major contribution of our paper is to give an integrated index of trade costs at national and international level that reflects technological progress. Coupled with the increasing differentiation and geographical reallocation in factor endowments across the world, they fully explain globalization. The analysis calls for further integration of growth and trade theories.

Keywords: globalization, economic growth, economic history, nineteenth century economic history, United States history, Britain history, industrial organization

JEL Classification: F10, F20, L50, N10, N11, O10, O30

Suggested Citation

Mateus, Abel M., Development Theory and Globalization, the First Wave: A Reinterpretation (December 30, 2013). Available at SSRN: https://ssrn.com/abstract=2444598 or http://dx.doi.org/10.2139/ssrn.2444598

Abel M. Mateus (Contact Author)

University College of London (UCL) ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

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