Working Paper

IDS Discussion Paper;365

Globalisation, Industrialisation and Sustainable Growth: The Pursuit of the Nth Rent

Published on 25 January 1998

Globalisation offers the potential to raise economic growth rates significantly. But at the same time, it also exposes firms and economies to intense competitive pressures. Declining terms of trade can result, and in some circumstances this may lead to immiserising growth, that is, an increase in economic activity which delivers lower standards of living.

The result is growing unequalisation, both between and within countries. These developmental pitfalls can be avoided if the productive sector develops the ability to withstand the intense competitive pressures that are associated with Globalisation. This requires the ability to identify an appropriate ‘economic rent’, and hence to escape from commodity production. A theoretical framework for understanding this process is laid out, and nine forms of rent are discussed. However, by their nature, rents are dynamic, so the developmental challenge also encompasses the need to identify and appropriate new forms of rent. This analysis applies to all sectors, and to rich and poor countries alike. The policy implications of alternative developmental paths are discussed in the conclusion.

Publication details

published by
Institute of Development Studies
Kaplinsky, Raphie
IDS Discussion Paper, issue 365
1 85864 225 6


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