New International Economic Order

The New International Economic Order (NIEO) was

a set of proposals put forward during the 1970s by some
developing countries through the United Nations Conference on Trade and Development to promote their interests by improving their terms of trade, increasing development assistance, developed-country tari reductions,
and other means. It was meant to be a revision of the
international economic system in favour of Third World
countries, replacing the Bretton Woods system, which
had beneted the leading states that had created it especially the United States.

3. They must be free to set up associations of primary

commodities producers similar to the OPEC; all
other States must recognize this right and refrain
from taking economic, military, or political measures calculated to restrict it.
4. International trade should be based on the need to
ensure stable, equitable, and remunerative prices for
raw materials, generalized non-reciprocal and nondiscriminatory tari preferences, as well as transfer
of technology to developing countries; and should
provide economic and technical assistance without
any strings attached.

History
3 Resource allocation mechanisms

The term was derived from the Declaration for the Establishment of a New International Economic Order, adopted Haggard and Simmons claimed that:
by the United Nations General Assembly in 1974, and referred to a wide range of trade, nancial, commodity, and
A number of social mechanisms are possible
debt-related issues (1 May 1974, A/RES/S-6/3201).[1]
to aect resource allocation in any economic
This followed an agenda for discussions between indusorder. An authoritative allocation mechanism
trial and developing countries, focusing on restructuring
involves direct control of resources while, at
of the worlds economy to permit greater participation
the other end of the spectrum, more marketby and benets to developing countries (also known as
oriented private allocation mechanisms are
the North-South Dialogue). Along with the declarapossible. Most of the debates within the NIEO
tion, a Programme of Action and a Charter of Ecooccurred over allocation mechanisms, with the
nomic Rights and Duties of States (12 December 1974,
southern hemisphere countries favoring au[2]
A/RES/29/3281). were also adopted.
thoritative solutions.
In the 1970s and 1980s, the developing countries pushed
for NIEO and an accompanying set of documents to be
adopted by the UN General Assembly. Subsequently, 4 Ideology
however, these norms became only of rhetorical and political value, except for some partly viable mechanisms,
NIEO proposes central planning, as opposed to free marsuch as the non-legal, non-binding Restrictive Business
kets.[3] It is based on the (French) mercantilist idea that
Practice Code adopted in 1980 and the Common Fund
international trade would be a zero-sum game (i.e., causes
for Commodities which came in force in 1989.
no net benets), and on the view that it does not benet the rich at the expense of the poor. Some American economists challenge the idea of trade as a zero-sum
2 Tenets
game transaction.[4]
The main tenets of NIEO were:

5 Legacy

1. Developing countries must be entitled to regulate

and control the activities of multinational corpora- In Matsushita et al.'s World Trade Organization, the authors explained part of the legacy of the NIEO:
tions operating within their territory.
2. They must be free to nationalize or expropriate foreign property on conditions favourable to them.

... tensions and disagreements between developed and developing countries continue: the
1

7
latter expect a greater degree of special treatment than industrialized countries have afforded them. This demand was expressed
comprehensively in the New International Economic Order and the Charter of Economic
Rights and Duties of States promoted by UNCTAD in the 1970s. Although the Charter was
never accepted by developing [sic] countries
and is now dead, the political, economic, and
social concerns that inspired it are still present.
The Charter called for restitution for the economic and social costs of colonialism, racial
discrimination, and foreign domination. It
would have imposed a duty on all states to adjust the prices of exports to their imports. The
realization of the New International Economic
Order was an impetus for developing country
support for the Tokyo Round of trade negotiations. Critics of the WTO continue to state
that little of substance for developing countries came out of either the Tokyo or Uruguay
Rounds.

Criticism that price regulation is

inecient

The powerful countries of North America and Western

Europe felt threatened by the NIEO and continuously
tried to criticize and minimize it; according to economist
Professor Harry Johnson, the most ecient way to help
the poor is to transfer resources from those most able to
pay to those most in need. Instead of this, NIEO proposes that those poor countries that have monopoly power
should be able to extort these transfers. In practice such
power has caused most harm to other poor countries.[5]
Commanding prices above their natural level usually
reduces consumption and thus causes unemployment
among producers. Moreover, price regulation typically
gives the extra income to those in control of who is allowed to produce, e.g., to governments or land-owners.[6]

References

Citations
[1] Declaration for the Establishment of a New International
Economic Order: United Nations General Assembly document A/RES/S-6/3201 of 1 May 1974
[2] Charter of Economic Rights and Duties of States: United
Nations General Assembly document A/RES/29/3281 of
12 December 1974
[3] The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture,
Oct 5, 1976, p. 6

REFERENCES

[4] The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture,
Oct 5, 1976, pp. 1-2
[5] The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture,
Oct 5, 1976, pp. 6-7
[6] The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture,
Oct 5, 1976, pp. 11-12

Sources
Jagdish N. Bhagwati (editor) (1977) The New International Economic Order: The North-South Debate.
ISBN 0-262-52042-7.
Cox, Robert. (1979) Ideologies and the NIEO: Reections on some recent literature. International Organization 33 (2): 257-302.
International Progress Organization (1979)
International Meeting of Experts on the New
International Economic OrderPhilosophical and
Socio-cultural Implications
Rothstein, Robert L. (1979) Global Bargaining:
UNCTAD and the Quest for a New International
Economic Order Princeton: Princeton University
Press. (Traces formation of UNCTAD and its role
in the NIEO.) ISBN 0-691-02190-2
Craig Murphy (1984) Emergence of the NIEO Ideology. Boulder, Colorado: Westview. ISBN 086531-664-3
Zaidi Sattar reviews Threat to Development: Pitfalls
of the NIEO by William Loehr; John P. Powelson in
Journal of Economic Literature 22(1) (March 1984)
130131
Breda Pavli and Cees J. Hamelink (1985) The New
International Economic Order: Links between Economics and Communications. UNESCO. ISBN 923-102311-X
Stephan Haggard and Beth A. Simmons (1987) Theories of international regimes. International Organization 41(3):498.
Robert Looney (1999) New International Economic Order in Routledge Encyclopedia of International Political Economy. ISBN 0-415-14532-5
Antonio Cassese (2001) International law. Oxford
University Press. ISBN 0-19-829998-2. Page 400.
And, second edition, 0-19-925939-7. Page 330.
Mitsuo Matsushita, Thomas J. Schoenbaum, Petros
C. Mavroidis (2003) The World Trade Organization:
Law, Practice, and Policy. Oxford University Press.
ISBN 0-19-927425-8. Pages 388389.

3
Rao, M. P. (2004) The New International Economic Order
Hugo Ruiz-Diaz (September 2005) Une tribune
pour les pays du Sud. Le Monde diplomatique. Pages
20 and 21.
Adam Sneyd (2005) New International Economic
Order in Globalization and Autonomy Online Compendium edited by William D. Coleman and Nancy
Johnson

Further reading
Rist, Gilbert: Le dveloppement, Histoire d'une croyance occidentale, Presses de Sciences Po, Paris,
1996 - engl. The History of Development: From
Western Origins to Global Faith, 3rd edition, London: Zed Books, 2008, ISBN 1-84813-189-5 Chapter 9
The Darker Nations: A Peoples History of the
Third World by Vijay Prashad and Howard Zinn
(Editor) A "peoples history" of the worlds impoverished countries and their failures to oppose to the
United States and Soviet spheres of economic inuence following World War II to the present. ISBN
1-56584-785-7
Introductory note by Ahmed Mahiou, procedural
history note and audiovisual material on the Declaration on the Establishment of a New International
Economic Order in the Historic Archives of the
United Nations Audiovisual Library of International
Law
Procedural history, related documents and photos
on the Charter of Economic Rights and Duties of
States in the Historic Archives of the United Nations
Audiovisual Library of International Law

See also
Fairtrade certication
Fair trade
Liberal international economic order
New World Information and Communication Order
Trade justice
Trade Justice Movement
UNCTAD
Washington Consensus

10 External links
Centre for Research on New International Economic
Order (CReNIEO)

11

11
11.1

TEXT AND IMAGE SOURCES, CONTRIBUTORS, AND LICENSES

Text and image sources, contributors, and licenses

Text

New International Economic Order Source: https://en.wikipedia.org/wiki/New_International_Economic_Order?oldid=698700586

Contributors: Edward, Kaihsu, Grm wnr, Bobo192, Arthena, AzaToth, Pedro Aguiar, Tickle me, BD2412, MarSch, DVdm, RussBot, Garion96, Frankie, SmackBot, NantucketNoon, AnOddName, Chris the speller, Nixeagle, EdGl, CmdrObot, N2e, Frankie816,
Adamsneyd, JabbaTheBot, Flyer22 Reborn, Der Golem, Tarcisio5, SchreiberBike, DumZiBoT, Addbot, Lightbot, Groovenstein, Shadowjams, Nieocrom, Forp, ChuispastonBot, ClueBot NG, Gareth Grith-Jones, MelbourneStar, Helpful Pixie Bot, Wbm1058, Meclee,
UNAVL, Kijaw, Munchkin2013 and Anonymous: 39

11.2

Images

11.3

Content license

Creative Commons Attribution-Share Alike 3.0