The core—a central region in an economy, with good communications and high population density, which conduce to its prosperity—is contrasted with the periphery—outlying regions with poor communications and sparse population (for examples, see unemployment). ‘Either defined in geographical or sociological terms, the center represents the locus of power and dominance and importantly, the source of prestige, while the periphery is sub-ordinate. Simply put, a center–periphery relationship is about hierarchy’ (Azaryahu (2008) Soc. & Cult. Geog. 9, 4).
Cores are associated with high wages, high technology, and high profit inputs and outcomes. Geographically, these processes have tended to concentrate and segregate—this produces places where core processes dominate and places where peripheral processes dominate. ‘For short-hand purposes these may be designated as “core” and “periphery” but they must never be seen as purely one or the other: so-called “core countries” encompass numerous, if minority, peripheral processes; and the opposite is so for “peripheral countries”’ (Brown et al. (2002) GaWC Res. Bull. 236). ‘When transport costs fall below a critical value, a core–periphery spontaneously forms, and nations that find themselves in the periphery suffer a decline in real income’ (Krugman and Venables (1995) Qly J. Econ. 110, 4). Lanaspa and Sanz (2001) Papers Reg. Sci. 80 add congestion costs and infrastructure to Krugman's model, and Baldwin and Forslid (2000) Economica 67, 267 introduce Romerian product innovation growth into the model. M. Fujita and J.-F. Thisse (2002) develop a core–periphery model in which the agglomeration effects from concentrating R&D activity in the core, combined with relatively low transportation costs, generate sufficient value added to more than compensate the periphery for the loss of R&D activity.
The model has been criticized—it has been argued that uneven development is not the inevitable consequence of development, but of the particular mode of production used to bring about that development (Harris in L. Blume and S. Durlauf2006). Copus (2001) Eur. Plan. Studs 9, 4 finds the validity of conventional (spatial) models of peripherality ‘increasingly questionable’.