Using a monopolistic pricing model as benchmark, this paper develops a dynamic framework within which issues concerning the role of export-processing zones in promoting economic openness and transition is assessed. Technological learning and adaptation contribute profoundly to economic development in LDCs; multinational activities tend to generate an externality that facilitates the process of technology transfer and learning. The model signifies these critical factors. The study suggests, among other things, that the concept of export-processing zones may serve as an effective policy means, when implemented properly, in achieving greater economic openness and growth. In this gradual evolving development process, countries that operate export-processing zones may follow a different transitional path and sequence from the one that is often cited in literature.

This paper assesses the extent to which foreign direct investment in developing countries crowds in or crowds out domestic investment. We develop a theoretical model of investment that includes an FDI variable and we proceed to test it with panel data for the period 1970–1996 and the two subperiods 1976–1985 and 1986–1996. The model is run for three developing regions (Africa, Asia and Latin America). One version of the model allows us to distinguish crowding in and crowding out effects for individual countries within each region. The results indicate that in Asia – but less so in Africa – there has been strong crowding in of domestic investment by FDI; by contrast, strong crowding out has been the norm in Latin America. The conclusion we reach is that the effects of FDI on domestic investment are by no means always favourable and that simplistic policies toward FDI are unlikely to be optimal. Introduction

This paper examines the implications of some of the main features of the globalization process for developing countries. It also makes several proposals for developing countries in considering national-level policies to face the globalization challenge, as well as coordination among developing countries in facing negotiations or making proposals at the international level.
While there are many aspects to globalization, among the most important is the recent globalization of national policy-making not only through the normal spread of orthodox theories but more importantly through international agencies, such as the Bretton Woods institutions and the World Trade Organization, through which the North has leverage over the South.
The paper examines the liberalization of trade, finance and investment as well as policy implications and choices in each of these categories. It is argued that, while there are some advantages to an open regime for developing countries, the impact of openness depends on a country’s level of development and preparedness to take on the challenges of subjecting local production units to foreign competition, of being able to break into world markets, and of weathering the volatility and fickleness of private capital flows and their propensity for lending recipient countries into a debt trap.

The paper discusses the issue of globalization from the perspective of employment and labour. It argues that it is the ideological basis of policy prescriptions advanced in support of globalization, rather than the increasing global interdependence, that is the real source of controversy and anxiety over globalization. The paper discusses the impact of the neoliberal policies on economic growth, employment, and income distribution, and examines the issue of labour market rigidities from the perspective of industrial as well as developing countries. It argues that developing countries face conflicting pressures: the new liberal policies prescribe liberalization of labour markets, while the organized labour in the industrial countries is pushing for higher labour standards in developing countries. The paper concludes with a section containing ideas on how the process of globalization may be humanized, so that the gains from the growth in incomes and trade are more widely shared within as well as across countries in an increasingly interdependent world.

To examine the case of early industrializers, we concentrate in this paper on the history of trade policy in Great Britain and the United States as two examples, and also refer to the cases of Germany and France. Our analysis in this paper indicates that it is a fallacy that early industrializers could have developed their industrial sector without infant industry protection. Indeed in all cases, to develop their industries, they went through an infant industry protection phase and heavy government intervention in the foreign sector. Nevertheless, the degree of protection and government intervention varied from one country to another. The United States was the motherland of infant industry protection not only at the intellectual level but also in actual fact. Despite the fact that the Industrial Revolution contributed to the rapid industrialization of Great Britain, its industrial sector benefited from trade protection and other forms of government intervention in the trade flow through the Navigation Act and by means of political power and even military power.

India started on a program of reforms, both in its external and internal aspects, sometime in the mid-eighties and going on into the nineties. While the increased exposure to world markets ('globalization') and relaxation of domestic controls has undoubtedly given a spurt to the GDP growth rate, its impact on poverty, inequality and employment have been controversial.
This book examines in detail these aspects of post-reform India and discerns the changes and trends which these new developments have created. Providing an original analysis of unit-level data available from the quinquennial National Sample Surveys, the Annual Surveys of Industries and other basic data sources, the authors analyze and compare the results with other pieces of work in the literature. As well as describing the overall situation for India, the book highlights regional differences, and looks at the major industrial sectors such as agriculture, manufacturing and tertiary/services. The important topic of labor market institutions – both for the formal or organized and the unorganized sectors – is considered and the possible adverse effect on employment growth of the regulatory labor framework is examined carefully. Since any reform of this framework must go hand in hand with better state intervention in the informal sector to have any chance of acceptance politically, some of the major initiatives in this area are critically explored.

The paper draws broad predictions from the developmental elements of new economic geography models and subjects them to empirical scrutiny. Industrial activity has spread from developed to geographically close developing countries in sectors that are intensive in immobile primary factors and not too heavily dependent on linkages with other firms. Only developing countries with an already established industrial base achieved industrialization in other sectors. The sizable change in both the size and structure of manufactured exports from developing countries has not been associated with corresponding changes in manufacturing value added. To benefit more from relocating industrial activities, developing countries need to create the critical mass of linkages that provide pecuniary externalities to industrial firms.

The purpose of this study is to clarify some confusion surrounding the infant industry argument presented by Frederick List. Its main contribution is to show that List recommended selective, rather than across-the-board, protection of infant industries and that he was against neither international trade nor export expansion. In fact,he emphasizes the importance of trade and envisages free trade as an ultimate aim of all nations; he regards protection as an instrument for achieving development, massive export expansion and ultimately free trade. List’s theory was a dynamic one, with dimensions of time and geography. Making a distinction between “universal association” and national interest, he argues that infant industry protection is necessary for countries at early stages of industrialization if some countries “outdistanced others in manufactures”. Nevertheless, protection should be temporary, targeted and not excessive. Domestic competition should in due course be introduced, preceded by planned, gradual and targeted trade liberalization. List guards, however, against premature liberalization. He is aware of the limitation of size for infant industry protection but claims that in most cases this obstacle could be overcome through collaboration with other countries. To List, trade policy is not a panacea; it is an element in his general theory of “productive power” (development); industrial development also requires a host of other socioeconomic measures.

The globalization of the world economy poses major challenges to the prevailing international economic system. The recent trade-investment system raises the issues of the marginalization of countries, firms, and agents if they are not capable to compete with large successful entities. The system engenders conflicts of interest in its interfacing with sovereign domains. In numerous cases such as employment and mutual trade benefits, it can produce zero sum outcomes. Consequently, significant segments of public opinion in many countries have mobilized against it. In the monetary and financial area, the system has from 1945 evolved on a piecemeal and ad hoc basis. In recent years, it has not been able to predict, prevent or effectively deal with financial crisis. It demonstrates a lacuna in global financial governance especially with respect to enforcing its rules on the major countries and bringing the private sector therein. The central institution, the IMF, is shown to be in need of basic reforms involving forging a global vision, reconsidering and updating conditionality, further democratization of political governance, and revamping the exchange rates and surveillance functions.

This paper briefly surveys the progress made in various areas of reform of the international financial architecture since the outbreak of the East Asian crisis, and explains the principal technical and political obstacles encountered in carrying out fundamental changes capable of dealing with global and systemic instability. It ends with a brief discussion of what developing countries could do at the global, national or regional level to establish defence mechanisms against financial instability and contagion.

The main purpose of this paper is to discuss the limitations of the market and the risks of government failure, and to present an alternative approach on coordination of economic activities by introducing the concept of "coordination system". In such a system, economic activities are coordinated by market, firms and government requiring the availability of "non-price factors" such as infrastructure, institutions and organizations. This approach is practical, country specific and dynamic. It is practical because it is based on the realities of the world economy and the situations of developing countries. It is country specific because the relative role of each coordination mechanism "market, government and enterprises", changes from one country to another, depending on their level of development and other socio-economic characteristics. It is dynamic because in each country the relative role of each mechanism changes over time during the course of economic development of the country.

The paper reviews the literature on the fallacy of composition with an emphasis on labour-intensive manufactures. It briefly addresses the protectionist and the partialequilibrium versions of the argument before focusing on general-equilibrium considerations and the debate on the manufactures terms of trade of developing countries. The review indicates a potential fallacy of composition problem in labourintensive manufactures, where competition among different groups of developing countries for export market shares may constitute a new form of the fallacy of composition. The likelihood of a country that exports labour-intensive manufactures to become subject to the fallacy of composition rises with the increasing integration of several strongly populated low-income countries into world markets, while it declines with continuous structural change and favourable aggregate demand conditions particularly in developed and the advanced developing countries.

This paper rejects the characterization of globalization as an autonomous and irresistible process driven by the impersonal forces of the market and technical progress. Whether domestic or global, market forces are shaped and controlled by policy choices and the institutional frameworks in which they are made. In the absence of adequate institutional frameworks and productive capacities, rapid liberalization is as likely to lead to stagnation and unemployment as to growth and rising incomes per head. We show that the major economic forces presumed to be crucial for spreading the benefits of globalization have been less global than often presented, have proved to be much weaker than widely predicted and carry potentially damaging effects as well as benefits. Accordingly, and without denying that by the late 1970s many developing countries needed to find new ways of inserting themselves into the international economy, we argue that the new policy orientation of macroeconomic stringency, downsizing the public sector and the rapid opening of developing country markets to foreign trade and capital after the debt crisis, has failed to produce an economic environment that supports faster economic growth and strengthens productivity performance. In suggesting the outlines of a more strategic approach to economic development the emphasis is on the need for domestic investment to be mobilized as the basis for industrialization and for a gradual approach to integration with the global economy.

This paper defines de-industrialization as a secular decline in the share of manufacturing in national employment. De-industrialization, in this sense, has been a universal feature of economic growth in advanced economies in recent decades. The paper considers briefly what explains this development and quantifies some of the factors responsible. It then examines the experience of the United Kingdom and the United States, which are two countries that have combined rapid deindustrialization with a strong overall economic performance. The paper considers both the domestic situation of manufacturing industry in these countries and its foreign trade performance, and examines in detail the United Kingdom balance of payments, and documenting how improvements in the non-manufacturing sphere have helped offset a worsening performance in manufacturing trade. It concludes that manufacturing still matters to economic performance even at the highest levels of economic development, and that "premature de-industrialization" could lead to serious mismanagement of the integration of developing countries into the global economy.

Despite the hold of the neoliberal orthodoxy on policy making in developing countries, industrial policy remains important for the promotion of industrial development. However, the context for the design of industrial policy has profoundly changed as a result of new rules governing international trade, the rise of global value chains and marketing networks, and other aspects of globalization. Traditionally, the case for industrial policy has been framed in terms of “market failures” but the paper argues that that is not a sufficient basis. After addressing the traditional points of criticism, an attempt is made to outline the “domains” of industrial policy in the current circumstances, especially for industrially lagging countries. As country contexts differ widely there are no satisfactory blueprints for policy making that countries can readily adopt. As in production decisions, considerable ingenuity and innovation is needed in designing policies. This is all the more necessary as the WTO rules have become increasingly stringent and the rise of international trading networks has created new barriers for young firms to enter the world market. These developments have changed the context but not the importance of policy in industrial development. The paper identifies areas where government intervention is needed and can still make a positive difference.

Medium-terms shifts in the structure of world demand affect the sectoral composition of domestic output, trade and employment. A sustained reduction of global current-account imbalances implies a decline in the share of household consumption in aggregate demand in the United States and the opposite development in China. The net effect of these adjustments for the world economy would be deflationary and yet insufficient for the unwinding of global imbalances. It would also cause sizeable adverse employment impacts in the world economy as a whole. A multilaterally coordinated rebalancing that would also include an increase in the share of household consumption in aggregate demand of developed country surplus economies would reduce these adverse effects. Apart from the countries undertaking rebalancing, developing countries in East and South-East Asia are likely to face the greatest adjustment pressure from global rebalancing.

The paper analyses economic performance of a sample of developing countries that have undertaken trade liberalization and structural reforms since the early 1980s with the objective of expansion of exports and diversification in favour of manufacturing sector. The results obtained are varied. Forty per cent of the sample countries experienced rapid expansion of exports of manufactured goods. In a minority of these countries, mostly East Asian, rapid export growth was also accompanied with fast expansion of industrial supply capacity and upgrading. By contrast, the experience of the majority of the sample countries, mostly in Africa and Latin America, has not been satisfactory. In fact, half of the sample, most of them low income countries, have faced de-industrialization. Even in some cases where manufactured exports grew extremely fast, e.g. Mexico, MVA did not accelerate and upgrading of the industrial base did not take place. Slow growth of exports and deindustrialization has also been accompanied by increased vulnerability of the economy, particularly the manufacturing sector, to external factors particularly as far as reliance on imports are concerned. Generally speaking, in the case of the majority group, trade liberalization has led to the development and re-orientation of the industrial sector in accordance with static comparative advantage, with the exception of industries that were near maturity. For example, in Latin America the expansion of exports has taken place mainly in resource based industries, the labour intensive stage of production, i.e. assembly operations, and in a few cases in the automobile industry. A number of industries which had been dynamic during the import substitution era continued, however, to be dynamic in terms of production, exports and investment. The industries which were near maturity when the reform started, such as aerospace in Brazil, benefited from liberalization as the competitive pressure that emerged made them more efficient.
The reform programmes designed by IFIs also failed to encourage private investment, particularly in the manufacturing sector; the I/GDP ratio fell even where the inflow of FDI was considerable – e.g. in the case of Latin America. Trade liberalization changed the structure of incentives in favour of exports, but the balance between risks and return changed against the manufacturing sector...

If there are any reservations about the importance of intensified cooperation between Brazil, Russia, India, China, and South Africa, this book will speedily dispel them. The usual reservations are based on doubts about economic complementarities and fears that all developing countries rely mainly on natural resource endowments and are therefore unable to trade with each other. This book shows that there is ample scope for comparative studies and hence cooperation in science and technology, and hence innovation for the mutual benefit of each.
The book also shows beyond any doubt that the state has a crucial role in sponsoring innovation, directly and indirectly, thereby leading a process that is often well-supported by the private sector. An essential foundation for innovation is obviously strong mathematics and science in schools and universities. However, state institutions are also vital for providing leadership, setting the pace, providing incentives, and in many other ways.

While it may be possible to mitigate poverty through social transfers, it is not possible to eradicate the processes that create poverty under capitalism. Eight such processes are discussed: the creation of the preconditions; petty commodity production and trade; technological change and unemployment; (petty) commodification; harmful commodities and waste; pauperising crises; climate-change-related pauperisation; and the unrequired, incapacitated and/or dependent human body under capitalism. Ways to regulate these processes and to protect against their impact are discussed.

This report on the MDGs and social justice argues that despite these gains, the focus on aggregate progress and the use of national averages to measure countries’ performance disguises a picture of uneven achievement that is characterised by deep disparities between social groups. In every country in every region, people are being excluded from the opportunity to play an active role in social and economic development on the mere basis of their race, ethnicity, religion, gender and, often, location.

In the present report, the Independent Expert sets out the parameters of a human rights-based approach to recovery from the global economic and financial crises, with a particular focus on the most vulnerable and marginalized groups. She urges States to see recovery from the crises as an opportunity for change, a chance to rectify deeply ingrained poverty and social exclusion, restore social cohesion and lay the foundations for more equitable, sustainable societies.
The Independent Expert first identifies the human rights framework that States must comply with when designing recovery measures. She notes that, while States have discretion to adopt policy measures according to their own context, human rights are not dispensable during times of economic hardship, and States must design and implement all policies according to their human rights obligations.
The Independent Expert analyses a number of recovery measures from a human rights perspective, highlighting their potential to threaten the enjoyment of economic, social and cultural rights. She then recommends measures that States should consider taking to facilitate a human rights-based recovery from the crises. These innovative measures will assist States in moving as effectively and efficiently as possible towards the full realization of economic, social and cultural rights. By adopting policies that have at their heart the realization of human rights, States can ensure a swifter, more sustainable and inclusive recovery.

This working paper: (i) provides an overview of global, regional and national income inequalities based on the latest distribution data from the World Bank, UNU-WIDER and Eurostat; (ii) discusses the negative implications of rising income inequality for development; (iii) calls for placing equity at the center of development in the context of the United Nations development agenda; (iv) describes the likelihood of inequalities being exacerbated during the global economic crisis; (v) advocates for urgent policy changes at national and international levels to ensure a “Recovery for All”; and, (vi) to serve as a general reference source, Annex 2 provides a summary of the most up-to-date income distribution and inequality data for 141 countries.

Is, as many of its enthusiastic proponents suggest, global civil society the key to future progressive politics? This paper first develops a definition of global civil society and explores the circumstances that have prompted its growth. The paper then considers the consequences of global civil society, particularly in relation to matters of sovereignty, identity, citizenship and democracy. The latter part of the paper proceeds to outline criteria for evaluating global civil society, identifying seven areas of promise and four possible dangers. The conclusion offers several suggestions that could help to maximise the benefits and minimise the pitfalls of global civil society.

Eariier literature on the development process stressed the importance of capital accumulation, and the role of financial institutions in that process. This paper stresses the importance of the processes and institutions by which capital is allocated, and the resulting uses to which it is put My views on this subject have been greatly affected both by the experience of developing countries during the past quarter century and by the major shift—evolutionary if not revolutionary—in the economists' paradigm over that period We have seen that capital accumulation is not enough: even the extremely high rates of savings of many of the socialist economies have not managed to compensate for their lack of ability in allocating capital, and these countries have, for the most part, not fared well. But extreme free market solutions have fared little better, perhaps best illustrated by the experience of Chile. True believers in the doctrines of the left and the right have this in common: they both claim that if the patient had only followed the doctor's orders more precisely, the medicine would have worked

In the summer of 1997, I was asked by a leading Japanese newspaper what I thought was the most important thing that had happened in the twentieth century. I found this to be an unusually thought-provoking question, since so many things of gravity have happened over the last hundred years. The European empires, especially the British and French ones that had so dominated the nineteenth century, came to an end. We witnessed two world wars. We saw the rise and fall of fascism and Nazism. The century witnessed the rise of communism, and its fall (as in the former Soviet bloc) or radical transformation (as in China). We also saw a shift from the economic dominance of the West to a new economic balance much more dominated by Japan and East and Southeast Asia. Even though that region is going through some financial and economic problems right now, this is not going to nullify the shift in the balance of the world economy that has occurred over many decades (in the case of Japan, through nearly the entire century). The past hundred years are not lacking in important events.

This paper analyses the economic and social causes of conflict, drawing conclusions for conflict prevention. Civil wars normally occur when groups mobilize against each other, on the basis of some cultural characteristic like ethnicity or religion. It is suggested that horizontal inequalities, i.e. inequalities among groups in political, economic and social dimensions, provide the basis for inter-group animosity. Policies to limit excessive horizontal inequalities are needed in all vulnerable countries.

Combating Poverty and Inequality is published just as global leaders meet to review and recommit themselves to a set of goals for reducing poverty agreed, under vastly different circumstances, a decade ago. The optimism of the new millennium is now overshadowed by the effects of multiple, interrelated crises. Progress in many areas appears threatened and resources are more constrained.
This volume provides a timely reminder of the strengths and limitations of various approaches to addressing poverty in the current context. It is the culmination of an ambitious project, Poverty Reduction and Policy Regimes, initiated with characteristic foresight by my predecessor as Director of UNRISD, Thandika Mkandawire. Responding to a concern that dominant approaches to poverty reduction, as refl ected for example in the PRSPs and MDGs, had serious shortcomings, the research aimed to reposition the analysis of poverty and poverty reduction processes within the broader political economy of development. A key premise of the report is that poverty cannot be reduced when both analysis of the problem, and the people affected, are relegated to the margins of development processes – targeted with safety nets or residual policy interventions while economic growth fails to create jobs, deliver services, or provide other means through which all individuals can realize their capabilities

One of our era’s foundational myths is that globalization has condemned the nation-state to irrelevance. The revolution in transport and communications, we hear, has vaporized borders and shrunk the world. New modes of governance, ranging from transnational networks of regulators to international civil-society organizations to multilateral institutions, are transcending and supplanting national lawmakers. Domestic policymakers, it is said, are largely powerless in the face of global markets.

Since its historic Conference in 1964, the United Nations Conference on Trade and Development (UNCTAD) has pursued its mandate of promoting the international trade and economic development of developing countries with a view to creating a more efficient, more stable and more equitable global economy that serves the interests of all people. It has pursued this goal through three types of work: first, analytical research and the elaboration of policy proposals by the UNCTAD secretariat; second, negotiations and consensus-building within the UNCTAD inter-governmental machinery – the Conference (which meets every four years), the Trade and Development Board (TDB), and various technical subsidiary bodies; and third, technical cooperation with developing countries to support their efforts to integrate into the global economy in a way which supports their development needs. Over the last 40 years, UNCTAD’s work has evolved considerably. This book commemorating the fortieth anniversary of the establishment of UNCTAD shows how UNCTAD’s work has evolved and identifies some of the major intellectual contributions that the organization has made in terms of both analytical views and policy proposals.

This publication is a product of the International Comparison Program, Global Office and the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this publication do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent - 2008

This publication presents the results of the 2005 International Comparison Program (ICP), which was led and coordinated by the World Bank during 2003–08. The size and complexity of this important statistical project made it imperative to distribute the tasks by geographic regions. Data collection was overseen by regional coordinating agencies, which compiled the results and produced regional estimates of purchasing power parities (PPPs). Throughout the process, the regional coordinators worked closely with the ICP global office at the World Bank. The strong partnership with the Eurostat-OECD and its parallel program made it possible to combine the results from the two efforts for this publication.

Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it. As the 2012 U.S. presidential election and the battles over the “fiscal cliff ” have demonstrated, the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism. Each side minimizes the concerns of the other, and each seems to believe that its desired policies are sufficient to ensure prosperity and social stability. Both are wrong.
Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it—because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords.

Development theory and policy during the last decade have been thoroughly dominated by the neoclassical paradigm and the neoliberal economic measures closely identified with this paradigm. "Structuralist" developmentt theory had been the prevailing orthodoxy during the 1950s and early 1960s. A central idea associated with structuralism was the belief that market failure is a pervasive feature of the underdeveloped economy with the corollary that the state has an important role to play in correcting it.
The neoclassical resurgence, which can be traced back to the late 1960s and early 1970s, attacked structuralism on three separate grounds. First, extensive state intervention to promote import-substituting industrialization had generated inefficient industries, requiring permanent subsidization for their survival with little prospect of achieving international competitiveness. Second, extensive government intervention tended to generate "rent seeking" on a substantial scale, which detracted the attention of economic agents from productive activities into lobbying for increased allocations of government subsidies and protection. Third, and most significant in the present context, empirical evidence on the experience of the most successful countries to emerge from the Third World, namely the four East Asian countries, Taiwan, South Korea, Hong Kong, and Singapore, showed that these countries achieved extraordinary rates of economic growth, which moreover had been consistent with a relatively egalitarian distribution of income. The unique performance of these economies had been generated by using an outward-oriented model driven by market incentives and a strong private sector.
What we are now witnessing is the emergence of a countercritique of the neoclassical paradigm based on a reinterpretation of the East Asian development experience. The four books under review in this essay are outstanding examples of a growing literature which seeks to refute the neoliberal vision of East Asian growth in terms of the economic benefits of trade liberalization, private enterprise, and a restricted role for the state.

This is a study of the growth of cities in four regions over the past 4,000 years. The authors discuss changes in the relationship between political/military power, economic power, and city systems with special attention to the rise of European hegemony and the subsequent rise of East Asian world cities. They compare East Asian urban growth with the original heartland of cities in West Asia and North Africa, as well as Europe and the subcontinent of South Asia. This reveals the trajectories of city growth and decline and the relative importance of the different regions over time. And they re-examine the hypothesis of synchronicities of city growth and decline across distant regions as the Afro-Eurasian world system became more and more integrated.

Decomposition of real commodity prices suggests four super cycles during 1865–2010 ranging between 30 and 40 years with amplitudes 20–40% higher or lower than the long-run trend. Non-oil price super-cycles follow world GDP, indicating they are essentially demand-determined; causality runs in the opposite direction for oil prices. The mean of each super-cycle of non-oil commodities is generally lower than for the previous cycle, supporting the Prebisch–Singer hypothesis. Tropical agriculture experienced the strongest and steepest long-term downward trend through the twentieth century, followed by non-tropical agriculture and metals, while real oil prices experienced a long-term upward trend, interrupted temporarily during the twentieth century.