Core–Periphery Models

A simplified view of economic space that assumes places can be categorized as belonging to an economic core (i.e., wealthy and possessing the means of production) or an economic periphery (i.e., poor and dependent on the core for the means to produce). The model is based on the observation of sharp economic development contrasts within and between nearly all territorial divisions. The core–periphery distinction can be found at any scale, from the local to the global. The specific characteristics of the core are vague but are generally thought to include the concentration of power, financial capital, human capital, research, innovation, diversified employment, and steady economic growth. Conversely, the periphery is characterized by low wages, low levels of diversification, volatile economic conditions, low levels of education, and little investment.

This method of classifying places is particularly useful to Marxist economists because it emphasizes the necessity of uneven development in market economies. The uneven development described by the core–periphery model springs from the Marxist assertion that the accumulation of wealth in the core is a product of the exploitation of resources obtained from the periphery. In addition, core systems construct patterns of trade that force the continued dependence of the periphery on the core. These patterns of uneven trade, wage minimization, multinational corporate structure, and migration encourage the departure of capital (both human and financial) from the periphery, thereby preventing less developed regions from altering their dependent status.

Although the core–periphery model is one of the most widely accepted conceptions in economic geography, it has faced criticism based on its simplistic reliance on trade as a causal mechanism and the vague[Page 62] treatment of power relations in the model. The pervasiveness of this core–periphery relationship is also a matter of considerable debate. Adherents of dependency theory consider the core–periphery relationship to be a necessary element of capitalism and thus a perpetual condition in market economies. Adherents to equilibrium economics assert that the reduced cost of operating in the periphery will encourage a diffusion of economic activity toward these areas, thereby ending uneven development. Much of the current research in economic geography is focused on either identifying the mechanisms that create and maintain the core– periphery dichotomy or on investigating the merits of the dependency and diffusionist arguments.