Cold War, Decolonisation and Economic Transitions

Stylised blue-green photos of a monk, a pixellated dog, a close-up spore, a person on a hill, a toy robot and a banana wrapped in chains

The US and USSR both had competing visions of the modern world that took their own social and economic systems to the Third World during the Cold War and decolonisation. To countries in the Third World, both models were Euro-centric and imperialistic in their different ways – and they tried both to play these rivals against each other and to develop their own distinctive approaches.  It was largely accepted that traditional, largely peasant societies needed to become modern, but it was not clear how to make the change and what model to follow. Did it mean following American free-market capitalism or Soviet rejection of markets? Did it mean the adoption of Japan’s state-led export economy or Latin American import-substituting industrialisation?  After the fall of the Berlin Wall in 1989 people believed that free markets had triumphed, but market transformation failed in Russia; whereas China embarked on a period of sustained growth with the Communist Party still in power.