Many agree that the crucial factor of economic growth is institutions in the long term, but there is less agreement on what determines institutional strength. The chapter uses objective measures of the institutional capacity (shadow economy and murder rate) to trace the trajectories of institutional developments in the Global South and discusses hypotheses to explain these trajectories.
Edited by Vladimir Popov and Piotr Dutkiewicz
Vladimir Popov and Jomo Kwame Sundaram
The chapter reviews catch-up or converging growth in parts of the Global South. By 1950, US per capita national income, adjusted for purchasing power, was nearly five times the world average. Since then, Western Europe and Japan have closed their per capita income gaps with the USA. East Asia, South Asia and some other developing countries have also started to close gaps with the West in recent decades. Thus, after two centuries of growing economic divergence, the world has witnessed an era of uneven convergence between parts of the South and the North. Alternative scenarios and some future implications are considered.