The World Economy by the OECD Development Centre
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The Impact of Western Development on the Rest of the World, 1000–1950

A major feature of world development which emerges from our macro–statistical evidence is the exceptionalism of Western Europe’s long–run economic performance. By the year 1000, its income levels had fallen below those in Asia and North Africa. In its lengthy resurrection, it caught up with China (the world leader) in the fourteenth century. By 1820, its levels of income and productivity were more than twice as high as in the rest of the world. By 1913 , the income level in Western Europe and its Western Offshoots was more than six times that in the rest of the world.

In order to understand the forces which made for the Western ascension, and the reasons for its greater dynamism than the rest of the world, it is useful to scrutinise the interaction of the West with the Rest over the long run. It is not feasible to embark on a comprehensive survey of all parts of the world economy. This chapter therefore presents four case histories. A great advantage of this detailed scrutiny is that it demonstrates how misleading it is to treat Western experience as homogeneous or monolithic.

The first deals with the Venetian Republic — the richest and most successful West European economy from the eleventh to the sixteenth century

Portugal is the second case. It was never as rich as Venice, but developed ship design and navigational techniques which made it possible to open up new routes and commercial contact with Africa and Asia. Portugal pioneered European expansion into the Atlantic, discovered Brazil in 1500 and began three centuries of colonial development in the Americas.

The Netherlands is the third case. It was the European leader in terms of per capita income between 1600 and 1820, with a high degree of international openness and specialisation, and a very large trading empire in Asia.

The United Kingdom is our fourth case. It followed the Dutch model of international specialisation and commercial development, built a much bigger colonial empire, and was a pioneer in industrial and transport technology.

Concentration on Western exceptionalism may be considered Eurocentric, but Western countries were the most successful and their experience is the best basis for understanding the roots of economic growth. Analysis of their interaction with the rest of the world throws light on the origins of economic backwardness, and the extent to which Western advance may have contributed to this.

The process of Western ascension involved violence against other parts of the world. European colonisation of the Americas involved the extermination, marginalisation or conquest of its indigenous populations. European contact with Africa was for three centuries concentrated on the slave trade. There were European wars with Asian countries from the mid–eighteenth to the mid–twentieth century designed to establish or maintain colonies and trading privileges. However, Western economic advance also involved devastating wars and beggar–your–neighbour policies. Venetian advance provoked conflicts with Genoa, Portugal clashed with the Dutch. The Netherlands was involved in an 80 year struggle for independence from Spain, four wars with Britain and more with France. The United Kingdom was involved in over 60 years of war with other West European countries from 1688 to 1815, and another ten years from 1914 to 1945.

Before starting on the detailed case studies, it is useful to present a brief overview of West European performance from the first to the tenth centuries, and from 1000 to 1500.