Dynamics of Centre-Periphery Relations

The Dynamics of Centre-Periphery Relations: The Need for a New Geography of Resource
Development
Author(s): Akin L. Mabogunje
Source: Transactions of the Institute of British Geographers, Vol. 5, No. 3 (1980), pp. 277-
296
Published by: The Royal Geographical Society (with the Institute of British Geographers)
Stable URL: https://www.jstor.org/stable/621843
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The dynamics of centre-periphery
relations: the need for a new
geography of resource development
AKIN L. MABOGUNJE
Professor of Geography, University of Ibadan, Nigeria
MS received 7 January I980
ABSTRACT. The centre-periphery model of the relations between developed and underdeveloped countries is based on the idea of t
'domination' of the latter by the former. The major instrument of this domination in recent times has been the multina
corporation. This paper calls attention to a number of countervailing strategies emerging in undeveloped countries to minim
some of the deleterious effect of this domination. These strategies include greater emphasis on national ownership of resou
insistence on real transfer of technology and stronger moves towards regional economic co-operation. For geography, the
developments in centre-periphery relations have implications both for the understanding of the new competitive basis for g
resource development and for greater research attention to the quaternary sector of global economic activities.
THE CONCEPT OF CENTRE-PERIPHERY IN GLOBAL GEOGRAPHY
IT will be useful to begin by considering the concept of a centre and

geography. In this connection, it is perhaps appropriate to recall the pionee
Sir Halford Mackinder. In his seminal paper presented to the Royal G
1904 on 'The geographical pivot of history', Mackinder was at pains to
first was that with modern improvement in steam navigation by the
century, the world had become a single political system where, accor
explosion of social forces, instead of being dissipated in a surrounding circu
and barbaric chaos, will be sharply re-echoed from the far side of the globe
in the political and economic organism of the world will be shattered
contended that it was probably some half-consciousness of this fact tha
much of the attention of statesmen in all parts of the world from terr
struggle for relative efficiency.
The second point that he made was that within this system of close
was possible to identify two broad regions-a pivotal, continental heartla
and a broad marginal zone surrounding it, the two being linked together by
is from Mackinder's article and clearly depicts these two regions. For
occupying the continental heartland would be virtually invulnerable to atta
west, and would be able to utilize its resources for the development of
industrial power. With this development would come also the opportuni
the marginal zone and eventually to gain control over the whole w
representation, it is important to bear in mind that at the time the pa
Union of Soviet Socialist Republics was still an unformed chimera in th
Mackinder, the state occupying the heartland was thought of as a pos
Germany and Tsarist Russia. Such a combination, he argued, could conq
comprising most of Europe, the Middle East, Africa, India and the Or
Australia and the Western Hemisphere.
277
278 AKIN L. MABOGUNJE
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Centre-periphery relations 279
Although the elaboration of these ideas became discredited as a result of
given by Haushofer in Germany under Hitler, the concept of global int
centre-periphery framework achieved new respectability in the post-
economic development literature. Meier and Baldwin were perhaps th
attempt a conceptual description of the existence of a centre-periphery
scale.2 They claimed to have discovered in this structure an important
some of the key developmental processes of recent times. According to them
centre of the world economy
if it plays a dominant, active role in world trade. Usually such

market-type economy of the primarily industrial or agricultural-
Foreign trade revolves around it: it is a large exporter and importer, an
movement of capital normally occurs from it to other countries. In con
be considered on the periphery of the world economy if it plays a secon
in world trade. In terms of their domestic characteristics, peripher
market-type economies or subsistence-type economies. The commo
ipheral economy is its external dependence on the center as the source o
of imports, as the destination for a large proportion of exports, and as th
This concept, although not fully spelt out to the same degree, had b
by Raul Prebisch of the United Nations Economic Commission for Lati
explain the persisting economic backwardness of Latin America compare
and Western Europe.4 Prebisch laid particular stress on the adverse term
by producers of primary products on the periphery in their commerce wit
of the world economic system.
Since then, this concept has been further elaborated and refined,
extended to investigating relationships below the global level at conti
regional scales. It is today a central concept in regional analysis and a corner
pole theory of regional development planning. More importantly, and still
has spawned a new school of thought on the phenomenon of underdev
idea of 'dependency'. This school, in the words of Gabriel Palma, atte
societal relations through a comprehensive social science which stress
nature of the economic relations of production and offers a critique of
reality of development and underdevelopment into dimensions analytically
other and of the economic structures of global society.s
The centre-periphery concept in global geography divides the world sim
The centre comprises the developed countries of Europe and Nort
market-economy and the centrally-planned economies) whilst the perip
countries of Latin America, Asia (excluding Japan) and Africa. These ar
referred to as the 'Third World', which in 1977 accounted for some 19
per cent of world population if China is excluded. Based on per capita G
a broad identification of these two regions. None the less, like all simple
hides considerable internal differences among the countries at both th
iphery. With regard to the periphery, for instance, it is possible to disting
ranks the rapidly industrializing countries such as Brazil, Mexico, Argen
South Korea where per capita G.N.P. of between $iooo and $2000 have a
There are also such O.P.E.C. countries as Kuwait, the United Arab Emi
Saudi Arabia, Gabon, Oman and Venezuela which are amongst some of th
in the world in terms of their exceptionally high per capita G.N.P. Other f
111
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tion apart from the sharp discrepancies in income and the different st
remarkable variation in the size of the countries, the significant range
amongst them and the striking contrasts in their natural resource endowm
In spite of this heterogeneity and differentiation among countries at t
been argued, and I believe quite rightly, that these countries do exhibit an
their relation to the global economy, based on their continued depende
centre. Or, as Abdalla puts it:
dependence is with all its corollaries the basic common denominat

countries and comprehensive decolonization is the only path out o
specifications that distinguish countries or groups of countries in
short of destroying the fundamental community of condition and goal
Indeed, the increasing appreciation of the fundamental nature of this c

and goal provides the basis for the growing solidarity among these countri
newly evolving world order.
THE NATURE OF CENTRE-PERIPHERY RELATIONS
This characterization of the global society as falling into two broa

periphery is conceptually meaningful only to the extent to which it en
global relationships. One of the major thrusts of my presentation
that are taking place both in the reality of these relationships and
changing reality. Until perhaps the end of the Second World Wa
between the centre and the periphery was seen within the benign c
division of labour in which the centre specialized in the production
periphery in the production of agricultural and other primary com
According to this classical scheme, such a division of labour should, th
benefit both the centre and the periphery through maximizing
consumption and spreading the benefits of such maximization to b
Such a beneficial consequence of international trade as betw
periphery was based on one critical assumption, namely that the be
will be distributed alike over the whole global community, either by t
the corresponding raising of incomes. Such distribution would take pla
competition in the product and factor markets at both the centre and
assumption of atomistic competition and the equitable distribution
progress that Prebisch challenged in his publication of 1950 in regard t
tried to explain the reason not only for the long-term deterioratio
countries at the periphery but also for the imperative necessity for su
vigorous programme of industrialization.7
In spite of the criticism of this position at the time, events sin
credence to a situation now generally described as one of 'unequal
Table I shows, whilst in 1950 exports from countries of the periph
nearly a third of the world total, by 1972 their share had dropped
might have been worse if the petroleum-exporting countries had n
position over the period. By contrast, the countries at the centre,
market-economy type with which virtually all countries at the periph
share of world exports from 60 to over 72 per cent over the same peri
of the countries at the periphery showed a rate of growth of per capit
cent in the period 1950-70 and many of them actually recorded ne
TABLE I
Share of major groups of countries in total world exports
Category 1950 1960 1970 1973 1974 1975 1976

Value in billions of dollars
World 60"7 128-3 312-4 570"9 832"7 872-2 986-3

Percentage distribution
World 100i0 100 0 I000 oo iooo 00 0 100 0 oo 00
Developed market-economy
countries 6I13 66.8 72"1 7I18 65 5 66"7 65.6

Socialist countries 8.2 I i8 o109 o109 8.9 9"9 9"9
Developing countries 30o5 21 4 170 17"7 25.6 23-4 24-5
Major petroleum exporters 6-2 6"6 5"6 6"9 14"9 1'35 14"4
Rapidly industrializing
countries 3-7 2 2 2.3 2-9 2.7 2-5 2-9

Others 20o6 12.6 9.I 7'9 8.o 7T4 7"2
Source: UNCTAD (1978) Review of international trade and development, 1977
(New York) p. 25
developed market-economy countries recorded in the 196os an annual growth rate of per capita
output of 8 per cent.8
Not unexpectedly, there is today some considerable disquiet about both the theoretical
validity of various conclusions of international trade theory such as, for instance, issues of factor
price equalization, and the practical consequences of policies based largely on it. Indeed, this
disquiet prompted the holding recently of a Nobel Symposium on international trade theory by
leading economic specialists, to which I and a number of other geographers were invited to
contribute from the special perspective of the geographical discipline in the area of location
theory and regional development. One of the objectives of the Symposium was to seek for a
more comprehensive explanation of the size and changes of production in different regions
rather than that offered by the usual factor proportion model which had proved very useful in
the theoretical analysis in the post-war years. Bertil Ohlin, the prime mover of the Symposium,
in one of his contributions emphasized the importance of incorporating various other questions,
notably differences in technology, international aspects of jaxation, social regulation, risk,
internal transport costs and development, into further elaboration of this theory.9
Apart from international trade, another perspective for looking at centre-periphery
relation has been provided by Hilhorst in terms of a 'domination' model.'I Deriving from
Franqois Perroux and discussed within the framework of a nation state, this model emphasizes
that a centre-periphery relation exists when the reactions of a sub-system B (identified as the
periphery) are insufficient to offset the actions with regard to them of another sub-system A
(identified as the centre). In such a relationship A dominates B, the centre dominates the
periphery. The insufficiency or inability of the periphery B to offset actions of the centre A is
explained by one or a combination of the following factors: (i) A may be considerably bigger
than B; or (ii) A may have a superior structure; or (iii) A may have a greater bargaining power. Of
these three factors, the third is perhaps the most important. This is because in bargaining
theory, one of the most basic conclusions is that a party's bargaining power increases with its
ability to alter its opponent's preferences and/or to control the alternatives open to the
opponent. "
In the context of a centre-periphery relation, the implication of greater bargaining power is
thus that in any dealings between A (the centre) and B (the periphery), A will have the
advantage, being better able to know B's preferences and alternatives
because its location within the system's communication network gives
information. This advantage is particularly crucial with regard to t
Whereas A has access to information from B as well as from the internati
it is better connected, B's knowledge of its own alternatives is most
preferences of neighbouring sub-systems that also form part of the perip
concerning A's alternatives will be practically nil.
In consequence, it is only to be expected that being better informed th
alternatives as well as preferences, A has a better position to start w
bargaining process, A also holds the winning cards. While A is w
preferences, whether through the use (or abuse) of the communication ne
arguments which it knows are sufficient to make B change its mind, B w
A's preferences since the latter's access to superior information can be use
Moreover, there is an additional factor to A's advantage. This is
national decision-makers show a tendency to overestimate interests
underestimate those more distant. A will make use of this psychological e
attempt to enforce control on B. The significance of this factor will dimi
the development process when politicians from B participate more fully i
process.
The two other factors that may underlie domination, namely differences in size and
structure, are often, though not invariably, interrelated. A superior structure is often the
consequence of larger size, particularly where size allows a sub-system to reap the benefits of
scale economies, agglomeration and a higher degree of specialization than can be attained in the
other sub-system. Size and superior structure place sub-system A in a monopoloid situation
with regard to technology and information and hence enable it to deepen its domination over B.
A new basis for centre-periphery relations has also been fashioned during the decade just
ended. This has been based on the logic of the underlying ecological unity and interconnections
which requires a reassessment of man's use and misuse of planetary resources. The real
momentum to this conceptualization of centre-periphery relations dates from the United
Nations Conference on the Human Environment held in Stockholm, Sweden in 1972. This
Conference attempted to float the idea of a global society trapped on a single planet earth and
having to reconcile the excessive consumption and depletion of natural resources by the
developed central region with the excessive reproduction of the population by the under-
developed peripheral region. Both put undue strain on the capacity of the global ecosystem to
support human life on a long-term basis and hence the need for a vigorous international effort
directed at the establishment of a desirable human environment.
The ecological movement called attention to the disproportionate consumption of finite
global resources by the countries of the centre. Indeed as Barbara Ward and Rene Dubos noted
with the whole economy, as with its most vital strand, energy, there will not be enough air,
water, space and amenity left for two-and-a-half billion developed peoples, still increasing
by at least 0-5 per cent a year, unless they adopt a more modest attitude to purely material
demands, unless they invent forms of consumption and enjoyment that make fewer
demands on a limited biosphere which is all there is to support them and which by the year
2000 will be supporting five billion other people as well.'2
The curtailment in levels of resource consumption in developed countries was to be

balanced by the sharp reduction in the rate of population growth in the underdeveloped
countries. Such acts of mutual self-restraint were to be undertaken in the realization of the need
for a new type of relationship between developed and underdevelo
co-existence in the technosphere.'3 This new relationship mu
strategy for planet Earth which, in the words of Barbara Ward, e
fact
that the natural resource most threatened with pollution, most exposed to degradation,
most liable to irreversible damages is not this or that species, not this or that plant or biome
or habitat, not even the free airs or the great oceans. It is man himself. 14
Centre-periphery relations have thus been seen from a variety of perspectives. They have
been viewed as the product of economic rationality and the maximization of mutual benefits
through production specialization; they have been exposed as arising more from domination
and the exploitation of the periphery by the centre; and it is being argued that they must be
based on the overriding necessity of survival and co-existence on a planet with finite resources
and limited pollution-absorbing capacities. Whether one accepts the international trade or the
environmental view-point, it is difficult to ignore the fact that the evolution of the relationship is
strongly grounded in the domination of the periphery by the centre. Consequently, in consider-
ing the dynamics of the relationship, it is this model that provides the most realistic framework
for attempting to understand the emerging pattern.
THE DYNAMICS OF CENTRE-PERIPHERY RELATIONS
The 'domination' model of centre-periphery relations has been based

bargaining power of the centre vis-d-vis the periphery, apart from its
structure. None the less, in any interactive bargaining relation that sub
time certain fundamental changes can be expected to take place. In
sizes, bargaining processes in modern international relations are very di
past because they are less concerned with strategies of procedure in a cl
situation and more with a problem-solving search which emphasiz
relationships or hierarchies of relationships through a process of dec
of relevant information.' s In consequence, such relationships canno
stable and unchanging over a long period of time.
With regard to centre-periphery relations, this perspective undersco
tance of information. The superiority of bargaining power by th
related, among other things, to its central location within the globa
and therefore its better access to information. Yet, one of the most strik
half of the present century is what is generally described as 'informati
generation and presentation of a wide range of informational resou
audiences. Details of this explosion do not need to delay us nor the v
for it such as the electronic revolution in data analysis, storage and
revolution in instant communication round the world.
What the global explosion of information has done is to improve so vastly the access to
information of countries at the periphery that this is now a major factor in the dynamic changes
taking place in their relations with the centre. Of equal importance has been the existence of an
institutional framework through which such informational resources can become an integral
part of a learning process for redefining their position in the bargaining relationship with
countries of the centre. The most important of these institutions is clearly the United Nations.
Between 1945 when this organization was established by Charter and 1965, its membership rose
from 51 to 118 nations. By 1971, the number had further risen to 132. Today, membership of
the United Nations stands at 151 nations of whom nearly 70 per c
countries at the periphery.
Whilst the United Nations forum has provided a veritable opp
learning for countries at the periphery in their relations with those at
also further enhanced the instrument of their exploitative relatio
instrument, namely the multinational corporation, is today the most p
international relations between countries of the centre and those of th
multinational corporations have emerged from previous colon
dominate business activities which transcended the boundaries of t
the colonial era.16 But many have grown up in countries without previ
a result of an astute utilization of technical advantages and th
potentialities. The most important of these are of United States' or
total book value of about U.S.$6o billion foreign investment in coun
United States accounted for over 55 per cent, followed by Britain w
France with about 7 per cent.'7
Unlike colonial companies, multinational corporations exhibit a w
the economic activities of countries of the periphery. Whilst the
interested in trade and in the exploitation and evacuation of prim
multinational corporation is increasingly involved in direct local pr
and other activities. The position with regard to investment in cou
multinational corporations from the United States is very illustra
shows the incremental growth of direct investment by U.S. mul
sectoral activities in the underdeveloped countries of Latin Amer
slackening of emphasis on extractive activities: these accounted f
increments between 1950 and 1960 but dropped to under io per ce
rising again to only about 21 per cent between 1967 and 1973. By
manufacturing increased from 21'3 per cent to 64-8 and 44-9 per
periods. Other less developed countries appear to have been at the
and i973.
One reason why the multinational corporation differs so greatly from the colonial company
and why its activities are so critical for centre-periphery relations is the variety of trans-national
linkages implied by its operations. Figure 3, for instance, identifies nine such trans-national
TABLE II
Incremental growth of LU.S. direct investment in sectoral

activities in less developed countries, I950-73
195o-6o 1960-7 1967-73

Latin America
Mining and Smelting 14'5 2-3 6.2

Petroleum 42"I 6"4 14"4
Manufacturing 21 3 64"8 44'9
Other 22-2 26.5 34"5
Other Less Developed
Mining and Smelting 305
Petroleum 56-5
Manufacturing Io0I
Other 29 9
Source: Helleiner, op. cit.,
Country A Country B
Values, Norms, Styles Corporate Culture Values,Norms, Styles
Structures, Strategies Organizational Integration Structures Strateg

Policies, Policies
Host Country,Expatriate Human Relations Host Country, Expatriate

Visits, Friendships Visits, Friendships.
Engineering, Processes Engineering, Processes

Syste ms :Techology and
Systems Knowhow Systems.
Systems.
Sourcing
Marketing and
Needs Marketing Needs inte
Particular Capabilities Specialized Services Part

and Requirements and Requirements
Plant, Resources Property Holdings Plant, Resources,

Goodwill. Goodwill
Reserves Investments Financial I Flows Reserves, Investments

Borrowing, Cash I Borrowing, Cash
Initia Lnvestment
Capital Resources -- Original Capacity
HEADQUARTERS FOREIGN BASED

COMPANY AFFILIATE
FIGURE 3. Trans-boundary relationshi
linkages ranging from investment through trade, technological know-h
and organizational integration to corporate culture. The linkages ident
exhaustive and each of them can be further broken down into several comp
But they serve to emphasize the major transformation in the relationsh
the centre and the periphery and the increasing inappropriateness of the t
trade to capture the dynamic complexity of the new relationship betwe
Kolde puts it:
the shift from foreign trade to multinational business is restructuring the entire system of
transboundary relationships among nations and affecting not only the economic sphere of
life, but inevitably many other aspects . . . (It) means the emergence of a new set of
international institutions, and a decline and possible disappearance of some old ones such
as export and import houses, foreign trade specialist firms, and various governmental
agencies devoted to the international trade activities as such. 18
EMERGING COUNTERVAILING RESPONSES FROM THE PERIPHERY
These changes in the characteristics of the instrument of domination from

provoke countervailing responses from the periphery. Three of these resp
worthy of note. The first was a reassessment of what is implied by
development. The changing conception of what development entails is p
two papers written by Dudley Seers nearly one decade apart. In 1969, in
meaning of development', Seers argues that development involves not just
also conditions in which people in a country have adequate food and job
amongst them is greatly reduced. Or, as he puts it:
The questions to ask about a country's development are three: What has
poverty? What has been happening to unemployment? What has
inequality? If all three of these have declined from high levels, then b
been a period of development for the country concerned'. 19
By 1977, international attitude to the issue of development had altere

Seers to a new definition. As he remarked, the essential element mi
definitions is that of self-reliance. No country can expect to be develo
shoulders of others. However, as he further observed, the addition of
that the main emphasis in development should no longer be on overall
patterns of distribution. Rather, it would include
reducing dependence on imported necessities, especially basic foo

products, capital equipment and expertise. This would involve cha
patterns as well as increasing the relevant productive capacities .
self-reliance would also involve increasing national ownership and
sub-soil assets, and improving national capacity for negotiating wi
porations.
This greater emphasis on ownership is today an increasingly vital aspect of relationship

between the centre and countries of the periphery. Indeed, as Vernon argued in 1970, the record
of past decades has shown 'an increasing effort on the part of less developed countries to extend
their control over the exploitation of the raw materials that originate in their borders'. Such
economic nationalism currently takes many forms, from emphasis on joint ventures to indigeni-
zation of enterprises or outright nationalization. The United Nations reports a clear trend
TABLE III
Present and projected importance of underdeveloped countries to U.S.

imports of strategic minerals
Oo Imported from all 0o Imported from

foreign sources underdeveloped countries
1950 1970 1985 2000 1971
Bauxite 64 85 96 98 95
Chromium n.a. ioo i00 100 25
Copper 31 17 34 56 44
Iron 8 30 55 67 32
Lead 39 31 61 67 32
Manganese 88 95 100 100 57
Nickel 94 90 88 89 71
Potassium 13 42 47 61 n.a.
Sulphur 2 15 28 52 31
Tin 77 98 1oo Ioo 94
Tungsten 37 50 87 97 37
Vanadium 24 21 32 58 40
Zinc 38 59 73 84 21
Source: Overseas Development Council, The U

the Developing World: Agenda for Action, Ne
'3-39.
toward the most radical of these forms, that of nationalization. It noted, for instan
although nationalization of foreign assets rarely took place outside the centrally p
economies before I960, between 1960 and 1969, there was an average of 45'5 nationa
annually, rising to 93'3 per year during 1970-4 and all in Third World countri
implication of this trend is already clearly demonstrated in the improved bargaining pos
O.P.E.C. countries. Its wider importance can, however, be better appreciated again
background, shown in Table III, of the increasing contribution of underdeveloped cou
the strategic mineral import of, for instance, the United States.
It has, of course, been suggested that faced with the rising economic nationalism
countries of the periphery, multinational corporations engaged in resource exploita
increasingly turn back to higher-cost but politically more 'secure' areas in countrie
centre. The examples of the successful development of North Sea oil and the French
ment Interministerial Council decision in the early 1970s to encourage their large compan
redirect investment to non-Third World countries such as Canada and Australia have some-
times been cited to justify such a reaction.2I However, the recent manifestations of economic
nationalism in Canada, notably by the Saskatchewan government's decision in 1975 to take over
mining companies owned by several of the world's largest multinational corporations and the
threat of the Quebec government in 1977 to nationalize the asbestos industry calls into question
the 'security' of resource investments even in a developed economy.22
The second emerging response from the periphery to the increasing complexity of their
relations with countries of the centre is their growing sophistication on the issue of technology
transfer. In the late 1940s and 1950s it was strongly felt that, to develop, what a country needed
most was to industrialize. A most persuasive strategy of industrialization based on the idea of
import substitution became a cornerstone of development policy in most countries of the
periphery. None the less, after more than two decades of this strategy, with multinational
corporations providing the plants for industrialization under various arrangements of purchase,
licensing or franchise, it has become increasingly clear that what countrie
is not just machinery and equipment producing more and more luxury and
initiation of a genuine and authentic technological capacity to improv
power and determine the pattern of the product mix based on their felt n
reources. Or as Bhatt puts its:
The principal problem is to generate a process of progressive
productive power of the existing as well as the new sectors of th
appropriate technological changes and such changes in the institu
framework as are consistent with this process. The beginning obv
with the traditional sectors, skills and occupations and the ne
organically related to the traditional.23
But, as is very obvious, countries of the periphery face a technolog

which is qualitatively different from that confronted by nineteent
countries. This is because modern technology has long outgrown the
learnt from simple engineering and technological research. It is now
knowledge-based, requiring high-level scientific and technological m
growth and operation. It is capital-, scale- and skill-intensive, an
development and increasing real incomes, it is geared to the productio
and services intended to meet simultaneously a wide variety of functi
and status needs and wants.24 For these reasons, the creative adaptatio
suit the specific needs of countries of the periphery requires a high
scientific and technological capability which many of these countries still
Various strategies are, however, currently being pursued to correc
include, first, the systematic inventory of all technological processes a
India, for instance, this is now part of the task of the Ministry of Indust
collaboration with the various industrial development banks. Second
applied research institutes are being established whose functions involve sy
of clients and existing technology in the process of economic development
Specifically, they are expected to provide assistance to industries and
techniques from other countries. Numerous such institutes have been
of Latin American and Asian countries but their success to date has be
One factor which is currently seen as militating against the grow
capability in countries of the periphery is the practice of licensing te
multinational corporations to their subsidiaries or national enterpris
metal-working and 43 chemical firms located in Peru, Ecuador and Co
that:
ownership structure, product sector and licensing interact with choice of machinery
imports and research and development activities in such a way as to produce a 'technologi-
cal dependence syndrome' in which opportunities for 'learning by doing' are consistently
missed.2 5
He depicts the syndrome in the form shown in Figure 4 and emphasizes that greater attention
will need to be paid by developing countries to detailed terms of licensing agreements with
multinational corporations.
The problem of how to improve their bargaining power not only in regard to issues of
technological transfer but also in other areas of transactions with multinational corporations has
been leading countries of the periphery to a growing appreciation of the necessity for regional
Ownership structure
1. Foreign, state, mixed
2. National
Q=0.785 Q= 0.548
Size Product sector

1. Small 1.Chemical industry
2.Medium & large 2.Metalworking industry
0 =0. 768 Q =0.473 Q =0.755
Source of technology
1. Licence
Q=0.823 2.Other
I
Choice of machinery
imports Q= 0.975 Q= 0.855
1. Parent /Ilicensor
2. Other
I Technology dependence
Q=0.875 1.Yes (new product tech.)
! 2. Some & No (ability)
FIGURE 4. The technology dependence syndrome. Source: L.K. Mytelka, 1978 (note 25)
co-operation and integration. This is indeed the third of their responses. It is, of cours
that the objectives of regional co-operation and integration are wider than providing a coun
vailing element to the powers of multinational corporations. Indeed, many such attemp
more stress on greater production efficiency, increased trade activities and enhanced w
distribution among the co-operating partners. Furthermore, to date, most efforts at r
co-operation among countries of the periphery have, on the one hand, had minimal im
the acceleration of economic growth and almost negative effect upon general welfare
member countries.26 On the other hand, their reduction of intra-trade barriers and re
harmonization of auxiliary economic policy instruments have brought more benefit t
foreign-based multinational firms than to locally-owned economic activities. Such r
must be taken as in the nature of any collaborative enterprise but they must not blind us t
real potentiality in the eventual determination of the relations between countries of the cen
and those of the periphery.
Indeed, already in Latin America, the regional grouping of the Andean Countrie
Bolivia, Chile, Columbia, Ecuador and Peru has been pioneering ways an
combined strength with multinational corporations, particularly wi
domestic technological capabilities.27 These countries harmonized thei
their effort to curb some of the more notorious of the restrictive pr
corporations, including those involving the use of imported technolog
undertook for instance, not to authorize, save in exceptional cases, agr
obligations to pay royalties on non-used patents and trade-marks, pro
competing technologies or restrictions on the volume and structure of
IMPLICATIONS FOR GEOGRAPHY
The trends which have been so broadly outlined above have serious a
for the direction of conceptual and methodological development in geogr
branch of it concerned with resources and their exploitation. In the
considerations were squarely the preserve of economic geography. E
then defined as the 'study of the relationships between economic ac
within the context of place'.28 Environment was said to define a set of n
for human use along with other man-made resources such as techn
institutions. However, in much of the literature, emphasis was laid on th
on environmental resources as mediated through the price system and li
of technology, organizations and institutions, as resources in themselves
on economic geography concentrated on primary, secondary and ter
giving pride of place to those which are involved in international tra
In the period after 1950 with the so-called quantitative and con
geography, much of advanced economic geography came to involve
analysis.29 At the micro-level, locational analysis concentrated on the pr
and market prices in determining the distribution of production, althou
attention to the role of scale and agglomeration economies. In all o
premise was that locational decisions took place in the context of a
competition. At the macro-level, analysis depended largely on the law of
and emphasized, if somewhat implicitly, the acceptance of the prin
division of labour. One consequence of the rise of locational analysis
the subject accept, as it were, the validity of the statement by August L
the best location was far more dignified than the determination of the
model-building and conceptual endeavours grew more and more so
increasingly inappropriate and irrelevant to dealing with the problem
world.
Indeed, as the second half of the present century progressed, the
multinational corporations in internalizing much of the costs critical
analysis and operating in conditions of monopolistic or oligopolistic c
paramount in determining the location of productive activities in
internalization of costs led, for instance, to the phenomenon of uniform
as Chisholm remarked in 1966, 'occur over extensive territories for a ran
than has commonly been allowed'.30 Consequently, the orthodox rea
advantages of proximity for both buyers and sellers is not valid as a
locational patterns more complicated and depending in part upon the
the industry in question.
About the same time as the quantitative revolution was gathering
voices calling attention to the equally vital role of organizational an
spatial patterns. Both Keunig and McNee in t
attention to the 'enterprise', especially the mode
geography of economic activities.3' According
The giant corporations operate within the fram

longer a simple and direct regulator of pla
system, administrative decisions, rather th
administrative decisions may be based partially
but they must include many other considera
McNee, in fact, proceeded to attempt a concep

studies based on this approach and presented
example from Sweden, emphasize how crucial
capacity of giant corporations is for the geogr
the increasing tendency to vertical integrati
interaction flows which they generate would
rather than purely national or locational int
stratified information and material flows. For in
corporations with close to 1400 registered su
countries. Their strategic activities are within
and are concerned with the production of vegeta
and meat. Moreover, they have substantial int
such as packaging, printing, paper, chemicals, sh
engineering. Hence, any realistic geography of
to the determining role of multinational corpora
A second reason why interest in the geogra
multinational corporations is critical for a new
that their mediating role in the relationship bet
not likely to continue for long as a one-way a
appreciating the critical importance of technolog
can expect from them greater insistence on trad
know-how of multinational corporations. Alr
machines in the world economy has expanded
payment of royalties from patents have grown e
value of world exports of goods expanded by s
trade in machines expanded by about thirteen
fifteen per cent. The share of countries of the p
One can assume, however, that even if it is still
This concern with the international trade in
emphasis on those aspects of resource develop
ledge, organizational and entrepreneurial skills
resources, manpower and capital. This new e
into two categories: those which are location-spe
ofa country and those which are ownership-spec
of being used with other resources either in t
both location and ownership endowments affe
corporations competitive advantage derives from
activities whilst for host countries this comes fr
0.
000
I ~C3000
21\
4 2
1 19
6 2 1
f Vr
r 21
o Hed Ofic
(D~. f sb
FIGURE 5. Subs
1975 (no
Firm-specific comparative
National advantage
Comparative extreme incons
Advantage
extreme I II
Inconsequential III IV
FIGURE 6. Bargaining situations between governments and multinatio

Ohlin et al. (note 9)
the case of countries of the periphery, those conn

materials), a new basis is indicated for understanding th
This basis derives not from the market but from
multinational corporations and host countries outsid
sized in the diagram shown in Figure 6, location of acti
depends on how extreme or inconsequential are the
multinational corporations rather than on the play of m
outcome of the process of their mutual jostling.
Clearly, a new geography of resources must pay m
resource development. The locational significance of the
and the basis for their locational decisions must rec
literature. Moreover, at present most economic geog
activities in the primary, secondary and tertiary sec
greater emphasis be given to the quaternary sector, esp
in technology, managerial skills, research and developm
specialize, as well as to their impact on activities in the
One final issue needs to be stressed. A new geogr
ignore the paradoxical reversal that seems today to c
From a situation in which the role of countries of th
supplying basic food and industrial raw materia
increasingly with one in which the developed countries
the staple food items of developing countries. This is in
per cent of the population of these countries are said to
easy to blame much of this problem on the vagaries
failure of harvests owing to droughts. It is also possible
lack of adequate knowledge about land capability
cultivable land. But when all is said and done, it can
organizational capabilities, even more than purely te
in the so-called 'green revolution', are the most crit
Such capabilities constitute part of the resources of mu
which they can be traded off to countries of the perip
which those areas of the world come to develop their
CONCLUSION
What I have said so far can imply a very positive and uncritical
multinational corporations. This is not necessarily so. What I am try
these corporations provide today the most important institutional
relationships in the productive field between countries of the cent
developed. There have been various writers who see them and the
portentous for patterns of relations in the twenty-first century. T
doubts whether it would be the multinational corporations as we presen
view that as countries of the periphery get a better grasp of the rules
appreciation of their own bargaining position they will strive not simp
co-operation but to have an increasing voice in the ownership an
corporations with a view to making them truly multinational. Alt
these countries to attempt to establish their own multinational corp
directly some of the benefits from this mode of productive organizati
A recent experiment along this line in the field of computer techn
Latin America when major independent computer service compan
Colombia and Venezuela recently formed a Latin American multina
each of them is a shareholder.36 To ensure access to U.S. technology
this corporation, the Interamericana de Computaci6n (Intercomp),
companies, Porter International and General Research Corporation,
shareholders. The goal of Intercomp is simply stated. It is to maxim
one of the few Latin American-owned enterprises with in-house ca
develop and implement advanced computer and telecommunication
Latin America. Moreover, it is the only Latin American organizati
financial resources to enter fields of more sophisticated technology, an
systems especially adapted to Latin American requirements.
This broadening of the nationality base of the ownership of mu
the developing world is still a recent phenomenon but it can be expecte
the increasing effort towards regional economic co-operation. Its signif
alive a new basis in the dynamic relationship between countries of the
namely a deeper realization of their interdependence and their c
exploit and utilize resources within the context of a well-maintained an
human environment. Such a development would make it possible
posited against the background of the disproportionate consumptio
by countries of the centre and the gargantuan needs and requirements
people in countries of the periphery.
For geography, these emerging possibilities compel a reappraisal
tual and methodological tools of analysis but more particularly of
setting and the determination of problem priorities within our di
examination of whether we are always condemned to a band-wag
concern with pressing social issues. No doubt different branches of the
priority on the basis of perceived discontinuities between reality
capability. But coming as I do from a country at the periphery, I h
that no issue is more likely to dominate social discussions for the rest
concerned with the relations between developed and developing c
spatial distribution, exploitation, utilization and trade in resources
these discussions, I believe that geography has a vital contributio
international economic relations.
NOTES
I. MACKINDER, H. J. (1904) 'The geographical pivot of history', GeogrlyJ. 23, 421-37. See als
Democratic ideals and reality: a study in the politics of reconstruction (New York, 1919)
2. MEIER, G. M. and BALDWIN, R. E. (1957) Economic development: theory, h
3. Ibid., p. 147
4. PREBISCH, R. (1950) The economic development of Latin America and its pr
Commission for Latin America
5. For a detailed discussion of the 'school of dependency' see PALMA, G. (1978) 'Dependency: a formal theory of
underdevelopment or a methodology for the analysis of concrete situations of underdevelopment?', World Dev. 6, 881-924
6. ABDALLA, I.-S. (1978) 'Heterogeneity and differentiation-the end of the Third World', Development Dialogue 2, 18
7. For an interesting comment on this position see BAER, W. (1962) 'The economics of Prebisch and E.C.L.A.', Econ. Dev.
Cult. Change 1o, 169-82
8. UNITED NATIONS (1973) Review ofinternational trade and development, 1973 (New York) p. 15. Note the changes in the
situation after 1973
9. OHLIN, B., HESSELBORN, P.O. and WIJKMAN, P. (1977) (eds), The international allocation of economic activity.
Proceedings of a Nobel Symposium held at Stockholm (London)
io. HILHORST, J.G.M. (1971) Spatial structure and decision-making' in DUNHAM, D. M. AND HILHORST, J. G. M. (eds),
Issues in regional planning (The Hague) pp. 47-72; See also PERROUX, F. (1964) L'Economie du XXe Siecle (Paris) p. 25 ft.
ii. See, for example, KUHN, A. (1963) The study of society (Homewood) p. 245 if.
12. WARD, B. and DuBOS, R. (1972) Only one earth: the care and maintenance of a small planet (New York) p. 143.
13. Ibid., p. 209.
14. Ibid., p. 217.
15. WINHAM, G. R. (1977) 'Negotiation as a management process', World Politics 30, 87-114.
16. KOLDE, E. J. (1974) The multinational company: behavioural and managerial analysis (Lexington, Mass.) pp. 8-io
17. See UNITED NATIONS, (1973) Review of international trade and development, 1973 (New York); also HELLEINER, G. K.
(1975) 'Transnational enterprises in the manufacturing sector of the less developed countries', World Dev. 3, 642
18. KOLDE, op. cit., p. 22.
19. SEERS, D. (1969) 'The meaning of development', Int. Dev. Rev. December 1969, 3
20. UNITED NATIONS (1974) Permanent sovereignty over natural resources, ECOSOC, A/9716
21. See Le Monde, 12 May, 1972
22. See LAUX, J. K. and MOLOT, M. A. (1978) 'Multinational corporations and economic nationalism: conflict over resource
development in Canada', World Dev. 6, 837-49.
23. BHATT, V. V. (1975) 'On technology policy and its institutional frame', World Dev. 3, 652
24. FELIX, D. (1974) 'Technological dualism in late industrializers: on theory history and policy',J. econ. Hist. 34, 194-238
25. MYTELKA, L. K. (1978) 'Licensing and technology dependence in the Andean group', World Dev. 6, 456
26. See VAITSOS, C. V. (1978) 'Crisis in regional economic co-operation (integration) among developing countries: a
survey', World Dev. 6, 719-69
27. UNITED NATIONS (1973) 'Policies relating to technology of the countries of the Andean Pact: their foundations',
Proceedings of the United Nations Conference on Trade and Development, Third Session, Santiago de Chile, Vol. 3 (New York) pp.
122-36
28. GRIFFIN, P. E., CHATHAM, R. L., SINGH, A. and WHITE, W. R. (1971) Culture resource, and economic activity: an
introduction to economic geography (Boston) p. 6
29. See, for instance, SMITH, D. M. (1971) Industrial location: an economic geographical analysis (New York)
30. CHISHOLM, M. (1966) Geography and economics (London) p. 186
31. KEUNIG, H. J. (1960) 'Approaching economic geography from the point of view of the enterprise', Tyjdschr. econ. soc.
Geogr. 5 1, Io-I i; and McNEE, R. B. (1960) 'Towards a more humanistic economic geography', Tijdschr. econ. soc. Geogr. 51, 201 -9
32. McNEE, op. cit., 203-4
33. TORNQVIST, G. (1975) 'Spatial organization of activity spheres', in SWAIN, H. and MAcKINNON, R. D. (eds), Issues in the
management of urban systems, IIASA, Schloss Laxenburg, Austria, 1975; See also GYLLSTROM, B. (1976) On organizations,
production systems and regional planning in underdeveloped countries (Lund) 1976
34. See LINDBACK, A. 'International economic integration', in OHLIN et al. (eds) op. cit., p. 221
35. DUNNING, J. H. 'Trade, location of economic activity and multinational enterprises: a search for an eclectic approach',
in OHLIN et al. (eds) op. cit., p. 399
36. See SCHEMAN, L. R. (1973) 'The multinational in a new mode: ownership by developing companies', Int. Dev. Rev. 15,
21-4

Dynamics of Centre-Periphery Relations

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Dynamics of Centre-Periphery Relations

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The Dynamics of Centre-Periphery Relations: The Need for a New Geography of Resource

The Royal Geographical Society (with the Institute of British Geographers) is

MS received 7 January I980

THE CONCEPT OF CENTRE-PERIPHERY IN GLOBAL GEOGRAPHY

IT will be useful to begin by considering the concept of a centre and

" . . . . . ? '' 'I

if it plays a dominant, active role in world trade. Usually such

dependence is with all its corollaries the basic common denominat

Indeed, the increasing appreciation of the fundamental nature of this c

THE NATURE OF CENTRE-PERIPHERY RELATIONS

This characterization of the global society as falling into two broa

Share of major groups of countries in total world exports

Category 1950 1960 1970 1973 1974 1975 1976

World 60"7 128-3 312-4 570"9 832"7 872-2 986-3

countries 6I13 66.8 72"1 7I18 65 5 66"7 65.6

countries 3-7 2 2 2.3 2-9 2.7 2-5 2-9

The curtailment in levels of resource consumption in developed countries was to be

THE DYNAMICS OF CENTRE-PERIPHERY RELATIONS

The 'domination' model of centre-periphery relations has been based

Incremental growth of LU.S. direct investment in sectoral

195o-6o 1960-7 1967-73

Mining and Smelting 14'5 2-3 6.2

Source: Helleiner, op. cit.,

Values, Norms, Styles Corporate Culture Values,Norms, Styles

Structures, Strategies Organizational Integration Structures Strateg

Host Country,Expatriate Human Relations Host Country, Expatriate

Engineering, Processes Engineering, Processes

Particular Capabilities Specialized Services Part

Plant, Resources Property Holdings Plant, Resources,

Reserves Investments Financial I Flows Reserves, Investments

HEADQUARTERS FOREIGN BASED

FIGURE 3. Trans-boundary relationshi

EMERGING COUNTERVAILING RESPONSES FROM THE PERIPHERY

These changes in the characteristics of the instrument of domination from

By 1977, international attitude to the issue of development had altere

reducing dependence on imported necessities, especially basic foo

This greater emphasis on ownership is today an increasingly vital aspect of relationship

Present and projected importance of underdeveloped countries to U.S.

Oo Imported from all 0o Imported from

Source: Overseas Development Council, The U

But, as is very obvious, countries of the periphery face a technolog

Size Product sector

0 =0. 768 Q =0.473 Q =0.755

IMPLICATIONS FOR GEOGRAPHY

The giant corporations operate within the fram

McNee, in fact, proceeded to attempt a concep

FIGURE 6. Bargaining situations between governments and multinatio

the case of countries of the periphery, those conn

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