International commodity policy: UNCTAD and NIEO in search of a rationale

This paper concentrates on a critique of international commodity policy from a non-neoclassical perspective. It is argued that, despite the formulation of international commodity policy in UNCTAD and NIEO in terms of broad perspectives for major structural and institutional change, both the theoretical weakness of the formulation of the proposals and the realities of relatively weak bargaining power of Third World countries have led to negotiation almost exclusively in terms of narrowly defined price objectives. The discussion of the theoretical weaknesses is illustrated with reference to simulation studies of commodity markets and empirical evidence on terms of trade movements. It is argued that the UNCTAD/NIEO policies proposed are unsuitable for and unlikely to achieve the desired ends. The final section of the paper examines briefly and finds in the literature on ‘unequal exchange’ a possible hidden rationale for the indexation aspects of UNCTAD/NIEO policy. The paper concludes that the discussion of international commodity policy to date remains outside the realm of serious appraisal of the operation of the world capitalist system and the possibilities therein for major structural and/or institutional change.