Changing configurations of power in North-South Relations since 1945

The demand by Third World countries for a “new international economic order” also has its political dimension. Do the threats of commodity cartels, debt defaults, and investment expropriation reflect a fundamental shift in the balance of power between North and South? This paper argues, to the contrary, that the power of the South is quite limited. An analysis of trade, financing, and investment relations between North and South reveals the latter's clearly subordinate position, which is all the more weakened by the fragile political-administrative structures of many Third World regimes. Nevertheless, the demands being made should in some form be accommodated since they serve Northern interests in two important respects: they potentially allow the North new means of leverage in relations with the South; and they offer the North the opportunity to coordinate its various policies and interests in regard to the Third World. Had the South not called for a new international economic order, the North should have pressed for one.