The Problems of Development Gap between Developed and Developing Nations: Is There Any Sign of Convergence?

The Problems of Development Gap between Developed and Developing Nations: Is There Any Sign of Convergence?

Debashis Mazumdar
Copyright: © 2020 |Pages: 22
DOI: 10.4018/978-1-7998-1207-4.ch031
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Abstract

The persistently large income gap between the Developed Countries (DCs) of the North and relatively Less Developed and Developing Countries (LDDCs) of the South is one of the most notable features of the international community over the last few decades. Such large disparities in income are paralleled by huge gaps in other non-monetary indicators of well being. Different research works in this field have indicated that the average annual growth rate of per capita income in LDDCs has been faster compared to that in DCs particularly since early 1990s indicating a sign of convergence in the growth process. However, the absolute gap between the DCs and LDDCs in terms of per capita GNP has widened over years. In this chapter, an attempt has been made to indicate the pattern of β-convergence and σ- convergence in income growth between DCs and LDDCs during 1960-2012. The study observes that there remains a definite indication of β and σ convergence in the growth rate of real PCI across different groups of nations particularly during the period 2000-2013.
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Objectives

The study is essentially intended to enquiring the relevance of the convergence projection of the Neo-Classical growth doctrine among the countries in terms of per capita income (PCI) in the long-run. Hence, in this paper, our main objective is to find out whether the growth rates of per capita income in the DCs and the LDDCs have converged over time and whether that growth convergence has been accompanied by a substantial reduction in North–South gap in living standards over the last few decades or not.

So, we want to focus our attention to different aspects of ‘development divergence’ in the backdrop of ‘growth convergence’. That is, have the poor countries been catching up with rich countries in recent times? Is such a convergence in the process of economic growth necessarily implying a convergence in the process of economic development across nations? This is an important issue in development economics because the polarization of the world into two disparate components does not bode well for international peace or prosperity, especially in the long-run. Conversely, our objective is to get an answer to the question that can we expect an increasingly more equitable distribution of resources among the nations to contribute substantially toward the formation of a more stable international order? This paper is but a modest attempt to review these aspects.

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