Comparisons with currently developing countries.

I think that the NDCs were institutionally much less advanced in those times that the currently developing countries are at similar stages of development. To make this point, levels of development of then-developing NDCs need to be compared with today’s developing countries. Tabl e 3.7 compares the per capita incomes of the NDCs during the XIX and early XX centuries (in 1990 international dollars) with the 1992 incomes of today’s developing countries. In 15my opinion, this is only a very rough-and-ready comparison, given that there are well known problems with using income figures to measure a country’s level of development, especially when it involves using historical statistics over two centuries. However, the table does give a rough idea as to where the NDCs were they were developing, in relation to those of today’s developing countries.

The comparison shows that, in the 1820s, most of the NDCs were, broadly speaking, at a level of development somewhere between Bangladesh ( §720 per capita income) and Egypt ( §1, 927 per capita income) of today – such a group includes countries like Burma (Myannmar), Ghana, Côte d’Ivoire, Kenya, Nigeria, India and Pakistan. By 1875, most NDCs had moved beyond the Nigeria –India level of income, but even the richest ones (the UK, New Zealand and Australia) were at the level of today’s China ( §3, 098)or Peru ( §3,232). The rest including USA, Germany and France, were between today’s Pakistan ( §1,642) and Indonesia ( §2,749.

By 1913, the wealthiest NDCs (the UK, the USA, Australia and New Zeeland had reached the level of the richer of today’s developing countries (for example, Brazil, Mexico, Colombia and Thailand). However, the majority, from Finland to France and Austria, were still at the level of today’s middle income developing countries (such as the Philippines, Morocco, Indonesia, China and Peru)

Once that NDCs in earlier times had relatively low levels of institutional development compared to the countries that are at comparable levels of development today. For example, the UK in 1820 was at a somewhat higher level of development than India today, but it did not have many of even the most ‘basic’ institutions that exist in India, such as universal suffrage ( the UK did not at that point even have universal male suffrage) , a central bank, income tax, generalized limited liability, securities regulations.

Similarly, in 1875, Italy was at a level of development comparable to Pakistan today. However, it did not have universal male suffrage, a professional bureaucracy, even a remotely independent and professional judiciary, a central bank with a note issue monopoly or competition law – institutions that Pakistan has had for decades.

To give another example, the USA in 1913 was a level of development similar to that of Mexico today, yet its level of institutional development was well behind: women were still formally disenfranchised, as de facto were blacks and other ethnic minorities in many parts of the country. It had been just over a decade since a federal bankruptcy law had appeared (1898) and barely two decades since the country recognized foreigners’ copy rights in 1891. At this stage, moreover, the USA still had a highly -incomplete central banking system, while income tax had only just come into being (1913), and the establishment of a meaningful competition law had to wait until the Clayton Act of 1914. There was also no federal regulation on federal securities trading or on child labour, and what little state legislation existed in these areas was of low quality and very poorly enforced.

From these examples the conclusion is that in the early days of their economic development, the NDCs were operating with much less developed institutional today’s developing at comparable levels of development. Needless to say the level of institutional development in the NDCs fell well short of the even higher ‘ global standards ’ to which today’s developing countries are being told to conform.