HIST363: Global Perspectives on Industrialization

The key implication of these theories for policymaking is for governments to seek to reverse liberalisation of trade, with the aim of supporting home-grown industry to develop without competition from global firms based in the core – a set of policies known as import substitution. This requires policy measures on two fronts: firstly, to reduce the flow of manufactured goods from the core to the periphery by introducing protectionist trade policy, and secondly to incentivise firms to manufacture high-value goods within the country, rather than sell resources for others to do so. This depends both on the ability of the periphery to develop, or purchase, machinery and skills, and on the amount of short-term pain the economy, and the people, are willing to sustain: the shift from primary to secondary sectors could not occur overnight, while protectionism may lead to short-term shortages and substantial increases in the price of manufactured goods.

World-systems theory in particular also has implications for the international political arena, by recognising that periphery nations are not able to wield the same power as core nations in governance arrangements like the United Nations, despite supposedly having an equal seat at the table. This state of affairs thus prevents meaningful progress on issues like climate justice or international inequality.