Measuring Transition and Mobility in the Hierarchical World–Economy

Abstract

This paper provides a temporal stochastic framework that is used to analyze economic transitions of countries in the world-system. As such, it provides a contribution to a general quantitative rendering of the world-systems perspective. State space modeling using Markov chains provides a powerful stochastic instrument for global economic modeling when structure is known but relational uncertainty is present as well as for examining temporal change of geographic phenomena. Two phenomena are examined: (1) country mobility among regional classes within the world-economy; and (2) the stability of the rate of country-level transitions. Results suggest that although a moderate amount of movement has taken place in the period 1960-1990, the overall structure of the world-economy has not changed significantly. Thus, although the developmental hypothesis that countries are upwardly mobile has merit, empirical results suggest that very little impact is observed in the world-system because countries moving upward in the world-economy region sequence are nearly balanced by countries moving down the sequence. Copyright 2002 Blackwell Publishers Inc.

The Role of Foreign Direct Investment as a Structural Development Indicator of the Hierarchical World Economy

“…The model fits the data with /7-stadstic = 0.997 for the quasi-symmetric thirty-year transidon matrix, validadng the stationarity hypothesis (Dezzani, 2002;Fingleton, 1997). More detailed Markov transition data are presented in the appendix.…”

“…The economic and political characteristics of the world-economy regions are central to this study because the state-space classification exhibits a complex of linearly interacting behaviors which can be functionally related to the FDI behaviors. Core states, while politically more stable, are also better able to spread political and economic risk as observed through trade diversity and concentration indices (Dezzani, 2002). High trade/commodity diversity and low concentration are characteristics of diversified economies with extensive markets.…”

“…(1) income trough methods (Arrighi and Dangel, 1986;Babones, 2005;Korzeniewicz and Martin, 1994), (2) network blockmodeling methods (Kick, 1987;Nemeth and Smith, 1985;Smith and White, 1991;Snyder and Kick, 1979), and (3) the discriminant Markov methods (Dezzani, 2001;2002;Dezzani and Babones, 2008). Income trough methods, substantiated by the other methods coupled with Markov state-space analysis suggest that this framework has been very stable over the thirty-year time period of 1970 to 2000.…”

“…In this way, any description of change in the world economy must exhibit this structure. Each dR/dt is estimated and modeled as a Markov transition probability (Dezzani, 2002). The economic and political characteristics of the world-economy regions are central to this study because the state-space classification exhibits a complex of linearly interacting behaviors which can be functionally related to the FDI behaviors.…”

“…In addition to the high-income core roughly spanning North America, Western Europe, and Japan, and the low-income periphery which includes the majority of the world's countries a third structural state exists as the semiperiphery which is composed of wealthy, noncore countries sufficiently able to act independently (Arrighi and Drangel, 1986;Babones, 2005;Chase-Dunn, 1998;Dezzani, 2001;Dezzani and Babones, 2008). Dezzani (2001;2002) has demonstrated the changes in state composition of the hierarchy from 1960 to 1990. In general, the hierarchy exhibits stochastic stationarity and has demonstrated remarkable stability both in the 1960-90 period as well as in the 1980-2005 period (Dezzani and Babones, 2008).…”