Formation
There are a variety of reasons that periphery countries remain the way they are. One important factor that keeps countries in the periphery is the lack of development of technology. Another way periphery countries come to be is either the lack of a central government or the periphery country is under the control of another country. Periphery countries are known for exporting raw goods to core countries. What tends to happen is the maximum gain a periphery nation could earn is less than needed to maintain an equilibrium between costs and revenues. One thing periphery nations could do is to stop the increase of exports. At the beginning of the 19th century, Asia and Africa were considered periphery and their lack of development enabled the United States and Germany to remain successful core nations.
Although periphery nations are exploited by core countries,there is a purpose to the unequal exchanges of goods. For instance, the core countries have an incentive to gain a profit and this enables the world market to further grow. At times, there is a change in the balance of trade between the periphery and core countries. This occurs when the prices of exports from periphery countries decrease at a faster rate than the exports from core nations. In this case,the governments of the periphery nation are affected in several ways. For instance, there is an increase in unemployment as well as a decrease in state income. This type of interaction is unique because the core country involved is somewhat weaker than normal. An example of this occurring is the growth of the industrial capabilities of Italy and Russia towards the end of the 19th century. This has also occurred in other periphery nations such as Brazil, Mexico, and South Africa.
Read more about this topic: Periphery Countries
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