The core-periphery model is based on the idea that there are a "core" set of countries that exert the most control over the world's economy and that the rest of the world's countries are semi-peripheral or peripheral to that economic center. The "core" would include G7 countries and a number...
The core-periphery model is based on the idea that there are a "core" set of countries that exert the most control over the world's economy and that the rest of the world's countries are semi-peripheral or peripheral to that economic center. The "core" would include G7 countries and a number of other wealthy, technologically advanced countries with a high volume of international trade, while the "periphery" would include the world's poorest countries.
Proponents of this model argue that the modern core-periphery structure originated during the period of European colonialism, when European nations exploited their colonies for free natural resources and labor used to benefit citizens of the metropole. The core-periphery model is an updated version of that structure, with the "core" nations exploiting cheap resources and labor in less-developed peripheral countries to support and boost their own economies.
The core-periphery model is often illustrated in a sort of "hub and spokes" diagram, with few connections between the peripheral countries. Therefore, one assumption of the model is that peripheral countries cannot or will not develop their own trade specialties and trade with other peripheral countries. It assumes a peripheral dependency on the core that has historically been true but may not hold in the future.
The core-periphery model also assumes that the core controls the relationship between the core and the periphery and uses that control to exploit peripheral countries. While there are certainly hundreds of cases of a core country or its corporations exploiting a peripheral country or its workers, there are also cases of peripheral countries turning the income and trade generated from the core to their own advantage through smart policy. For example, Botswana has followed careful economic policies, helping it to capitalize on the income from its diamond deposits by building a stable government, attracting foreign investment, and diversifying its economy.