ABSTRACT
The notions that informed the new approach to development theory and practice were radically different from those of the 1950s and the First Development Decade. The new approach asserted the existence of a process of inequalising exchange between the North and the South, as the latter’s terms of trade of primary commodities exports for manufactured imports persistently deteriorated, as economic surplus was transferred from the South to the North through transnational enterprises, as mercantilist policies restricted access to technology, and as international capital limited structural change and constrained the potential for growth. A distinguishing feature of the new theories was that they ruled out the possibility of self-correcting forces operating spontaneously to restore equilibrium in the world economy. Persistent divergence between North and South was seen as the natural order. If these tendencies were to be corrected, deliberate policy actions would have to be taken, and thus international policy negotiations would become a special and continuing responsibility of the UN. There was accordingly a concentration on improving the international economic environment to promote development across a broad front. This was an attempt to rectify the gaps and shortcomings of the post-war system (encompassing IMF, IBRD, and GATT), which had given insufficient weight to the development issue. In this sense, the original, virtually exclusive, preoccupation with ‘measures requiring domestic action’ as the critical determinant of development was relegated to a less important place in the UN approach to economic development. During this period therefore the focus of attention in the UN, and especially in UNCTAD, turned to the negotiation of international policies and principles, organised on the basis of four country groupings – the Group of 77 (developing countries), the developed market-economy countries, the socialist countries of eastern Europe, and China. The main areas of negotiation were commodity prices, trade in manufactures, the international monetary system, the transfer of technology, transnational corporations, restrictive business practices, international shipping, and, at a general level, the economic rights and duties of states. Many of these negotiations led to agreements, codes, and resolutions, some with greater legal significance than others.12 Underlying these processes was a belief that market forces alone could not be relied upon to promote development, even if the policies of developing countries were optimal. Governmental intervention in cases of market failure was therefore necessary to support the development effort, and national strategies would have to be adjusted to one another with a view to a consistent set of international economic policies supportive of the development of the Third World.
