The new territorialisation of rural space in the globalization context: entrepreneurship in marginalized areas

 

La nueva territorialización del espacio rural en el contexto de la globalización: el espíritu emprendedor en las áreas marginales

 

Manuel Belo-Moreira¹

 

¹ Instituto Superior de Agronomía. Universidad Técnica de Lisboa. Tapada da Ajuda, 1349-017 LISBOA - Portugal, (mbelomoreira@isa.utl.pt)

 

Abstract

According to Marsden's (1999:243) approach, we can identify at least four spheres associated with land development: mass food markets quality food markets agriculturally related development and rural restructuring (non agricultural development). Particularly important in the current globalization context, are the density of affluent consumers of quality products and rural amenities, and the availability of national an foreign funds to finance the politics and regulations involved on those different development paths. Nevertheless, there are many lagging or less favored rural areas that will not be able to pursuit any of these paths, entering or accelerating a marginalization process, raising a rural development issue and the question of the role of specific policies needed to propose a positive restructuring.

Key words: agricultural related development, mass and quality markets, non agricultural development, rural development.

 

Resumen

De acuerdo con el enfoque de Marsden (1999:243), se pueden identificar por lo menos cuatro ejes asociados con el desarrollo rural: mercados masivos de alimentos; mercados de alimentos con calidad; desarrollo agrícola relacionado y reestructuración rural (desarrollo no agrícola). Particularmente importantes en el contexto actual de globalización, son la densidad de los consumidores ricos hacia productos de calidad y comodidades rurales, y la disponibilidad de fondos nacionales y extranjeros para financiar tanto la política como la normatividad involucradas en estos diferentes patrones de desarrollo. Subsisten, sin embargo, muchas áreas rurales rezagadas o poco favorecidas que no podrán transitar ninguno de estos caminos y que van a entrar o acelerar su proceso de marginalización, generando un tópico de desarrollo rural, así como preguntas sobre el papel de las políticas específicas necesarias para promover una reestructuración positiva.

Palabras clave: desarrollo agrícola relacionado, mercados masivos y de calidad, desarrollo no agrícola, desarrollo rural.

 

Introduction

According to Marsden's (1999: 243) approach, to define the parameters of the new territorialisation of rural space, we can identify the least four key spheres associated with land development: mass food markets quality food markets agriculturally related development, and rural restructuring (non-agricultural development). However, those dimensions do not apply identically in the different socioeconomic and political contexts. Particularly important in the current globalization context, are the density of affluent consumers of quality products and rural amenities, and the availability of funds (in the European Union, both national and European funds) to finance the politics and regulations involved on those different development paths. There remain, nevertheless, many lagging or less favored rural areas that will not be able to pursuit any of these paths, and will enter or will accelerate a marginalization process, raising a rural development issue and the question of the role of specific policies needed to promote a positive restructuring.

This paper points to three axes of analysis. First an attempt is made to reflect on recent changes on globalization context, considering that these changes could be a starting point to a new legitimization of public intervention; next, a short description of the logic and dynamics of the agents of the globalization in the rural areas provide the rationale for an insight on the role of the globalization shaping the new territorialisation of rural spaces, that is made later. After a short assessment of the entrepreneurship problematic, the shortcomings of neoliberal trends, which tend to reduce the needed policies for a positive rural structuring only to policies able to foster individual entrepreneurship are highlighted, making the case for the need to foster entrepreneurial function, particularly in the less favored areas.

 

The changing context of the globalization process

Since defining globalization is not the purpose of this paper, this section focus only those aspects that clearly link the current process to the political and ideological context of the last decades. The emphasis on the political and ideological context is justified, because current as well as other historical globalization processes cannot be conceptualized without considering the essential role of its ideological and political determinants².

Current globalization process has been prepared, as a long term project, by influent think-tanks constituted by a mix of philosophers, wealthy people, and neoliberal economists, that were extremely successful in transforming neoliberalism into the hegemonic ideology. The emergency of the neoliberal hegemony become evident in the context of the fiscal crisis of the State (O'Connor 1973), which was instrumental to the exploitation of government failures, either in industrial countries, or looking at the nation-state (American or European bilateral development projects) or United Nations sponsored projects aimed to developing countries (World Bank, FAO, UNDP, etc.), failures that had been successfully associated to unnecessary waste, associated to worldwide bureaucrats, tainted by corruption, and supported by the taxpayers. The message was clear, the economy and the society would be much better by reducing state intervention, which was popularized by the slogan: less state, better state.

The economic program of the neoliberal ideology was adopted by Margaret Tatcher in the U.K., and by the Carter Administration in the U.S., being afterwards greatly intensified by Ronald Reagan. Those were the times of deregulation, liberalization and privatization, which finally give place to a worldwide political program known as the Washington Consensus. This ideological and political hegemony was also extremely reinforced by the political and economic collapse of the Soviet Union that put an end to the sole rival of U.S. hegemony.

Therefore, neoliberal globalization could make their way without any credible political and ideological challenge.

Probably the two most important outcomes of globalization can be expressed by the increasing power of the global capital vis-a-vis the workers and all non capitalist forms of production, on the one hand, and by the weakness of the nation-state on this process, on the other. Even if, as Friedland (1994) put it, there are states and states, and spheres of intervention quite different one from another. However, the idea of a state more facilitator than regulator (McMichael and Mhyre, 1991), and a global finance capital more imposing than adapting to state regulation (Moreira, 1994), seem quite appropriate to describe the general picture. In fact, for most cases, the global capital not only succeeded in getting rid of most regulatory constraints, but it also auto-assumed the power to dictate many policy options of the governments, using a very powerful device known as the market discipline. That is, the political and economic hegemon, alone or using global institutions, such as the International Monetary Fund (IMF), the World Bank or the World Trade Organization (WTO), succeed to impose and legitimate the market discipline as the main device to evaluate economic policies all over the world. Complying with market discipline is nothing more than to accept the requirements of the global capital, through the supervision of rating or audit companies that use the exactly neoliberal standards to give their judgement. In these terms it is clear that non orthodox policies will be penalized by this market judgement regardless the democratic legitimization they could have. And furthermore these standards and codes rely heavily on an Anglo-American style of corporate governance and an arms' length model of financial development. They close off alternative paths to financial development, of the sort that have been followed by many of today's rich countries (for example, Germany, Japan, or South Korea) (Rodrik 2001:7).

These aspects contributed to reinforce economic integration, freeing the governments of the duty to search their own and specific development paths. Shortly, in many cases, global economic powers are the main forces in presence, meanwhile in other countries, the richest, it is possible to find some countervailing powers, able to direct, or at least to compensate, the outcomes of the free action of the global capital. I am refering particularly to certain levels of regulation of the capital, according with the power of the national or supranational institutions, as well as the compensation of the externalities and the possibility to pursue policies aimed to counterbalance the negative effects of the global capital.

Accepting these arguments, one must acknowledge that poor countries, not only do not have institutions powerful enough to act as countervailing power vis-a-vis the global capital, but they also do not have resources to design and enforce development policies able to counterbalance the effects of the global capital.

Evidence of these problems as well as the eruption of successive economic crisis, resulting from financial speculation³, have been determinant to increase the number of the voices questioning the neoliberal approach. And, much more than an affair of radical critics, a number of features, revealed by mainstream economists, provide evidence about clear shortcomings of the globalization, such as the excesses and perils of the financial market⁴, and also proved a pro neoliberal globalization bias of many supporting empirical studies (Rodrick, 2000).

At a more socio-political level, counter movements gained force and give birth to a process of rejection. This is also a global movement, constituting worldwide networks, linked through the Internet, and involving diverse and sometimes contradictory coalition of people, ranging from the most radical (left or right wing) that reject the fundamentals of neoliberalism, to the most pragmatic that only look for ways to temper its excesses and want to reintroduce the state as the necessary countervailing power. The later support the idea, shared by many observers very distant from critical ideologies⁵ that the desire to construct a completely market-driven world is utopian, because it is not only constantly denied by the real world, but also because state intervention is more and more considered essential to the well functioning of the market.

It is not yet possible to have a clear idea of the consequences, at a world level, brought about by recent and significant changes that will be mentioned below⁶. However, it seems, that, for the time being, the fundamental features of the globalization process did not change to a point that could put in question the logic and dynamic of the main agents of the globalization, but, there are also some indicators that the state-nations are gaining legitimization to assume higher levels of intervention.

This changing context affecting globalization is closely related to issues related with internal procedures of corporate America, making the case to new regulations, and also as a result from two types of decisions taken by the Bush Administration.

In the second half of 2001 the world has been informed that important icons of corporate America were cheating regulators and also their shareholders and employees. The list of firms under investigation is impressive⁷, besides the famous Enron⁸ and the most recent cases of Worldcom and Vivendi Universal. It was also recognized that those practices were covered by audit firms, breaking the confidence in what most of the financial markets is based. And, furthermore, it has also been unveiled that Wall Street analysts (from Merril Lynch & Co, but others are under suspicion) do not provide independent suggestions and misled investors in order to pump up bank fees (Borrus and McNammee, 2002).

Concerning the U.S. Administration, we must stress that the beginning of the war on terrorism, after the 11 September events, constitute a 180-degree change in the U.S. position concerning financial markets. Nowadays the U.S. government is promoting greater levels of nation-state or supranational controls on finance movements, contrary to the previous stubbornness against these regulations. This means that, suddenly, the U.S. government recognized the well founded basis of many globalization critics that, for a large period, have been stressing the perils involved in a totally non regulated financial market.

And, finally, the U.S. Administration is moving from its traditional pro trade liberalization in GATT .and WTO, being enough to notice the taxes on imported steel and the dramatic increase in subsidies of the new Farm Bill, even at the risk of being condemned at the WTO or facing the menace of possible retaliations. It seems clear that electoral purposes, connected with the Bush government's right wing constituency, are leading the U.S. Administration to the adoption of unpredictable antiliberal moves, that not only can slow down the pace and weaken the neoliberal globalization process, but also give powerful arguments to the globalization critics.

It is interesting that, derived from the anti-terrorist struggle, we assist nowadays to a very close scrutiny of financial movements. That is, the most visible aspect of the neoliberal globalization has started to be put in question, exactly from the part of the ones that until now did not want to hear any argument contradicting the supposed solid basis of the international financial markets.

On the other hand; the mentioned events that affect corporate America, that put in doubt the transparency of the accounts and the well founding of the U.S. accounting standards, as well as the scandals involving Wall Street analysts, are being considered, from the most liberal opinion makers, as one of the most dangerous menace to the future of the capitalism. In fact, it is enough to read the editorials of BusinessWeek and The Economist to see the concern originated by the most recent shortcornings of a fully deregulated economy left alone. Of course that these liberal business journals ring the alert bells and call for a renewed business ethic that give confidence to the people fearing though state intervention, even if in some cases they will accept this intervention as a second best⁹.

It is not yet clear if this changing context will break the wall of the hegemonic ideology, but it is certain that it has already provoked some important fissures. Thus, this changing ideological, political and socio-economic context must be taken into account on the reflection on the effects of the neoliberal globalization on the spatiality of economic activities affecting rural life, and, particularly, on the role of the sate concerning the development of entrepreneurial activities in rural areas. I consider these changes particularly important, since, as already mentioned, they brought a regained legitimization to state intervention, meaning that, from an ideological and political point of view, a purely market driven world is loosing its power of attraction.

 

The logic and dynamics of the agents of the globalization in rural areas

In order to provide a systematic, though admittedly far from comprehensive overview of the impact of global business strategies on rural areas, in Table 1, global capital is disaggregated into three fractions, according to the sphere in which it predominantly operates, namely: 1) production (manufacturing and primary/extractive), 2) circulation (commerce, transport and associated services), and 3) financial speculation. In each case, the effects of the penetration of each type of global capital is examined primarily in terms of A) the scale economies generated, B) the permanence of investment impact, and C) the changes wrought in market dominance and market share, D) the effects on the local and global enviroment¹⁰, and E) ideology, values, mind sets and culture.

This disaggregation must not let us forget that in the real world the differences between them tend to blur, since most of the transnational corporations (TNC) are composed simultaneously by the three different fractions, that is, not only they have production and circulation preoccupations, but they also do not reject to be involved in financial speculation regardless their core business (Chesnais, 2000, quoting a 1993 I.M.F. publication about International Capital Markets). However, it must be stressed that one of the main outcomes of the neoliberal globalization is exactly the reinforcement of the financial/speculative and circulation purposes of the global capital vis-a-vis the production axes. Trend that only became possible due to the information technologies revolution, transport and logistic improvements¹¹ and the changes that these revolutions allowed on managerial (long distance control, flexible specialization and the emergence of the network enterprise) and financial issues (financial engineering, take over and merges mania, etc.).

 

Productive dynamics on rural areas

Classical economic location theories are based on the costs of production factors and transportation. In the neo-classical model of production and trade, production is determined by factor endowments, technological differences and the freeness of trade. Here this is contrasted with a new economic geography approach in which locations derive some of their comparative advantage from scale, and ability to exploit scale is in turn limited by the extent of the market (Crafts and Venables 2001:3).

Considering this approach, location of agricultural activities put in consideration simultaneously the agronomic point of view (soil, climate, water availability, etc.) as well as socio-economic and political factors that classic theories or the new economic geography highlight.

Under these circumstances, it seems appropriate to give particular relevance to the logic and dynamic of the agents of global capital, the main responsible for the intensification and acceleration of changes on the production geography. That is, global capital increasingly concentrating in huge TNCs adopt a variety of production strategies, ranging from higher levels of vertical integration, through mergers and acquisitions, to a large use of subcontracting schemes with local capitalists, cooperatives and petty commodity producers. These strategies increase scale effects impact, particularly to the agricultural productions more scale sensitive, such as intensive animal breeding (broilers¹² and pork) or cattle ranching (requiring huge grazing areas). This means that much of the relevant agricultural production, mainly mass production, is every day more concentrated on the zones more suitable for them. That is, mass food production tend to locate in the most favorable zones.

Even if quality food production tend to follow the same trend, particularly when this type of production is typical fordist, one must acknowledge that scale effects are not so vital as they are in mass food production. In fact, quality food production is aimed particularly to satisfy niche market demand, that is, a particular kind of demand that are willing to pay a premium price for a perception of quality (either objective or socially constructed). Thus, quality food markets can be free, at least temporarily, of many constraints that constantly are pushing mass production to a never ending pursue of scale economies and higher and higher levels of productivity. On the other hand, quality food production is not so demanding in what concerns the most favorable production conditions, meaning that it could be found in less favored areas. Furthermore, globalization brought new advantages to these productions, since features such as the internet, can be a powerful device to expand the niche markets, allowing them to penetrate the most rich demand segments for these quality products.

Continuing with Marsden's proposal, besides these two agricultural development paths, rural spaces have two more possibilities: agriculturally related development, and rural restructuring (non-agricultural development).

Agricultural related development, however, only could be pursued in the terms defined by Marsden in a general context of rich countries. In fact, it is in these countries that the nation-state and/or supranational institutions, have the means to develop agricultural related development programs, and only in these countries exist regulatory institutions necessary for a market economy, and the means to make them effectively functioning (Rodrik, 2000). And, furthermore, only in these countries exist educated and skilled people able to change their attitudes and practices in order to comply with the needs for the achievement of new development patterns.

Shortly, less favorable zones can enter an agricultural related development path only if a number of conditions are fulfilled, conditions that, unfortunately, only can be found in rich countries.

Rural restructuring, by definition a non-agricultural development path, appeals to the development of a number of non-agricultural economic activities in rural spaces, and shares most of the problems of the agricultural related development. It needs that a number of conditions are fulfilled to foster entrepreneurship on rural areas, namely public goods (access and infrastructures) and institutions, and the existence of people that are eager to consume rural amenities, and have the means to pay for these consumption. Thus, for most cases, this path is only possible for certain kind of areas that are very far of being considered less favorable. The exception is rural restructuring based on industrial development, were the global capital look particularly for diligent and cheap work force, the explotation of local resources (mineral, energetic, patrimonial or potentially tourist resources), or when the global capital purpose is the installation of very particular facilities, such as industries that are not any more welcome in wealthy areas. However, considering the new economic geography conclusion that agglomeration matters (size and location), the logical inference is that industrial rural restructuring cannot be generalized, but it will be a succession of particular cases, unless the rural is close of the agglomerations from an economic point of view.

Finally, it is time to come to terms with the marginalization path (absent from Marsden's approach). That is, one should also deal with the continuous trend to the decline of traditional agricultural productions¹³ that cannot be price competitive with mass production, and do not succeed in accessing to the marketing channels of quality food production. When these traditional productions are linked to less favored areas, globalization certainly accelerate and exacerbate the effects of capitalist competition, since it puts these productions in the same final market segment in competition with other productions, some of them from very long distance, that have identical or better quality and lower prices.

Thus, the less favored zones, if left alone, will face a bitter alternative: either they will enter or intensify the marginalization path, in the limit, population decline will force to abandon most of these activities, or they will look for the installation of the global capital leftovers, namely the nasty facilities referred by Marsden. Indeed a very poor prospect in both cases!

Therefore, cutting this Gordian knot will require a number of conditions involving both nation and state policies (or supranational in the European Union case) as well as collective or/and individual actions. In this paper I direct my attention to the individual actions that, based in entrepreneurial activity, are supposed to counterbalance the marginalization trends intensified by the globalization process.

 

The entrepreneurship problematic

A previous question about entrepreneurship that needs to be tackled is the fundamental distinction between the Schumpeterian entrepreneur and the business owner, which include the self-employed people. Entrepreneur being the actor, that not only take risks, but is particularly interested about innovation, being able of the creative destruction so well described by Schumpeter (1989), and the business owner or the self employed person, someone who runs a business, many times adopting risk avoiding strategies and being completely careless about innovation, that is very far away from the Schumpeterian archetypal. This distinction is important since there are strong reasons to believe that these business owners or self-employed people represent the overwhelming majority of business activity in the most marginalized territories. This idea is supported by empirical research about entrepreneurship in marginalized mountain areas in Greece and Portugal¹⁴ as well as by the logic of individual Schumpeterian entrepreneurs that tend to follow the trend to move from the less favored to the most favored zones. As Romer (1994:19) put it, the transfer of human capital from places where demand for it is lacking to areas where demand for it abounds is as powerful a piece of evidence as all the crosscountry growth regressions combined.

This means that even if, as a result of any particular conjunction of coincidences, a plethora of entrepreneurs will born in marginalized areas, this will not mean that they will put their skills, and capabilities in use to change the fate of these marginalized areas. On the contrary, real Schumpeterian entrepreneurs, due to their intrinsic characteristics, will be ambitious enough to look for the best opportunities in more developed and attractive territories. Thus, unless their mobility will be artificially restrained, they will move to the places were they will consider their ambition can be satisfied most rapidly, places that certainly are not marginalized areas.

Therefore, even if it is possible to create entrepreneurs, through education and training which Schumpeter believed impossible one must be aware that entrepreneurship in marginalized territories only can be fostered if a number of coincidences, policies, and personnel wills exist to attract people with entrepreneurial skills and capital. That is, if it is possible to have an attractive mix of classic location factors, external economies and a favorable relative rewards system on entrepreneurial and innovative abilities in those marginalized territories. However, these conditions seems to constitute a logical impossibility, otherwise those territories would not be marginalized.

Accepting this argument, it is possible to conclude that the neoliberal solution of fostering individual and self-help entrepreneurship cannot be that miraculous device that will provide the necessary and diverse solutions to prevent or combat marginalization¹⁵. This being said, one must be aware that, even if this policy is far away of being the panacea, it could be a valuable instrument to combat marginalization, because what marginalized territories need is a new business dynamic, even if it is not based primarily in Schumpeterian entrepreneurs.

 

Fostering business development

If fostering business development is a necessary condition, it is not sufficient, since business development does not start by decree. However, according with Schumpeter (1989: 260-261) (...) the entrepreneurial function need not be embodied in a single physical person. Every social environment has its own ways of filling the entrepreneurial function. For instance, the practice of farmers in this country has been revolutionized again and again by the introduction of methods worked out in the Department of Agriculture and by the Department of Agriculture's success in teaching these methods. In this case then it was the Department of Agriculture that acted as an entrepreneur (...) Again the entrepreneurial function may be and often is filled cooperatively.

So, more than following the neoliberal rhetoric based on the individualistic ideology of the self-help, which is frequently assumed as the very essence of entrepreneurship, what it is necessary to emphasize is the need to focus on the entrepreneurial function. It is obvious that to combat marginalization individual entrepreneurs are welcome, but on these fragile territories, it is probably much more important to attract collective efforts. Among them we can consider agricultural or other cooperatives, development associations or, using the same example used by Schumpeter, state agencies or partnerships between state agencies and local associations. Probably, to introduce innovation and bring support to the development and qualification of the business owners, the involvement of state agencies will be crucial.

Far from trying to provide a comprehensive description of the overall conditions than can foster entrepreneurial functions I will only focus the attention at the specific questions with particularly importance for the marginalized rural areas, making a short assessment of the existing positive and negative factors as well as providing a description of policy recommendations that can foster entrepreneurial functions and business development^l6.

Among other factors fostering entrepreneurship in rural areas, the following may be enumerated:

♦ Natural environment and landscape that in some locations can foster certain types of entrepreneurial initiatives.

♦ The contribution of entrepreneurial assistance measures, activities and institutes. EU assistance measures have been particularly important for the newcomers to the European Union (Greece, Spain and Portugal).

♦ Industrial and entrepreneurial traditions, when they exist, providing external economies that can favor clustering and partnerships.

♦ Labor force characteristics, stability and costs. That is, fewer cases of conflict, closer relations between workers and entrepreneurs (greater workers loyalty limiting turnovers), workers more willing to carry out physically demanding manual tasks, lower costs of living and lower levels of labor demand contributing to lower wages.

♦ Existence of positive attitudes towards local entrepreneurs and their businesses. That is, the existence of a relative rewards system favorable to entrepreneurship.

♦ Strong local identity, a frequent peculiarity of the mountainous communities.

♦ The importance of social networks that in some contexts are extremely important assisting and helping business people, namely youngsters looking for self-employment (Gerry et al, 2000).

♦ Land availability that can be, simultaneously, a factor fostering some businesses, since usually is more abundant and cheaper than in urban areas, as well as an inhibiting factor.

♦ Similarly to the previous item, remoteness and peripheral situation can be an advantage to business depending essentially on the advantages or hindrances of proximity.

Factors inhibiting entrepreneurship are not only the ones that are literally oppose to the ones that favor it, but also some more specific, such as:

♦ In certain locations, such as in the Portuguese case, due to conservation policies land zoning legislation can be extremely restrictive, not only concerning industrial developments but also limiting housing facilities, therefore being unattractive to eventual immigrant investors, entrepreneurs and labor force.

♦ Remoteness usually inhibit entrepreneurship due to the increased levels of transaction costs, mainly transports. But it also can be positive to some business looking for proximity advantages.

♦ Finally, declining demographic trends, particularly the depopulation in the most marginalized rural areas, is clearly a factor unfavorable to entrepreneurship. It deprive business, since workers and potential clients become rare, social networks fade away, and population is aging, which is certainly not the better environment to look for innovative entrepreneurs able to take risks and to identify new opportunities.

 

Conclusions

Considering the logic and dynamics of the agents of globalization and the location determinants involved on the new territorialisation of rural spaces, there seems to be evidence enough to fear for the fate of the less favored areas. That is, if left alone, globalization forces will initiate or aggravate the marginalization path. And this is particularly clear in the contexts of less state intervention, and or when nation-state administration lacks the means to promote the development of these areas.

It also seems that there are reasons to believe that the individualist rhetoric, viewing the self-help entrepreneurship as the ultimate panacea able to counter the marginalization path, has the risk of being misdirected, unless there are clear and efficient policies fostering business development. And furthermore, since it is recognized that the best prepared individuals will tend to desert stagnant areas in favor of the more dynamic ones, it seems that in those areas the obvious development policy will be fostering entrepreneurial function rather than individual entrepreneurship.

If this reasoning is accepted, it remains unsolved the question of the means for the needed state intervention, and in these matters, globalization has been instrumental to increase the duality. On the one hand, the rich areas and nation- states, that have the means to develop those policies, and on the other, the less favored areas and the poor nation-states that do not have the means to implement them. It is true that the recent contextual changes referred before, namely the new legitimization of state intervention, could be a good sign. However, it also must be acknowledged that for many countries and less favored regions, for one reason or another, state intervention and the means to pursue development policies will continue to be a constantly postponed utopia.

 

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Notes

² By current globalization process I mean the phase of capitalism development of the last decades of the twen-tieth century.

³ That, as Obstfeld and Taylor (2002: 56-7) recognize, are in part a U.S. administration responsibility "In part a reflection of U.S. business interests, American administrations have pushed developing economies to liberalize on capital account; in some cases, liberalization ran far ahead of domestic financial systems' absorptive capacities, and clashed with national exchange rates policies. The resulting contradictions helped spark the developing country currency crises of the latter 1990s".

⁴ That as Krugman (1997) put it are far from being transparent and efficient and it is inevitably related with their logic and dynamic and the existences of boom and busts cycles.

⁵ Samuelson (2002) states that as most hard critics of capitalism know, a non regulated laissez faire will originate booms and bankruptcies, unemployment and speculative bubbles; Dani Rodrik (2001) criticizes the erroneous widespread idea that free trade is positively correlated with development; Stiglitz (1999) criticize IMF and World Bank development policies and makes the case for regulation needs.

⁶ The editor of The Economist, Clive Crook, a strong supporter of globalization, is particularly concerned with the possibility that globalization would be reversed by political forces in the advanced economies as happened after 1914. (Crook, 2002).

⁷ The 10tb June edition of BusinessWeek refers the list of firms under investigation by the Securities & Exchange Commission. Arthur Andersen, Deloit&Touche, Ernst&Young, KPMG, PriceWaterhouse Coopers, CMS Energy, Dynegy, Enron, Halliburton, Reliant Resources, Computer Associates, Network Associates, Global Crossing, Lucent Technologies, QWET Cornrnunications, Worldcom, Credit Suisse First Boston, Hedge Funds, Capital Markets, Merrill Lynch, Adelphia Communications, Edison Schools, KMART, PNC Financial Services, Trump Hotels, Waste Management and Xerox.

⁸ It was recently unveiled that Enron took advantage of energy deregulation and Californias energy crises to fuel the crisis. In a commentary Michael Mandel (2002) quoting a memo prepared by an attorney working for Enron, says the company was paid by the state of California to relieve congestion on Californias transmission lines without actually moving any energy or relieving any congestion.

⁹ In the May 6^th edition of BusinessWeek, a special report made the cover of the journal with the title How to fix corporate America and the following significant subtitle: Excessive pay. Weak leadership. Corrupt analysts. Complacent boards. Questionable accounting. Enough already.

¹⁰ This section draws heavily on Moreira (2001 and 2002), and Moreira and Gerry (2002).

¹¹ That is, lower transit times and containerization, meaning less costs (the cost of 1 extra day is around 0.3%-0.5% of the value shipped, quoted in Crafts and Venables 2001: 26).

¹² Heffernan et al. (1999), refer that 97% of US broiler production is concentrated in 40 firms, using 250 processing facilities.

¹³ As well as non agricultural productions.

¹⁴ Study carried out under the EU FAIR research Program, (Psaltopoulos and Skuras 2001 and Moreira and Caldas 2000).

¹⁵ It is interesting to note that it is in the Australian and New Zealand experiences that we can observe more clearly the pro and contra of the self help entrepreneurship rhetoric (Herbert-Cheshire & Lawrence 2001).

¹⁶ The following enumeration is based on the already mentioned empirical research (Psaltopoulos and Skuras 2001).