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Convergence Clubs and Multiple Equilibria: How Did Emerging Economies Escape the Under-Development Trap?

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  • Jean-Claude Berthélemy

Abstract

This paper explores the policy relevance of the under-development trap hypothesis, which postulates that poor countries are locked in a low equilibrium and that big push policies, involving a large amount of external assistance, would be necessary to lift them out of poverty. It shows that transfers, if not accompanied by structural change, cannot trigger such successful takeoffs. The paper then provides a test to identify countries that may have jumped out of their under-development trap. The test is based on the observation of multiple growth acceleration patterns that should be observed in the case of a successful takeoff. The paper identifies a dozen of such countries in a set of about hundred developing countries for which growth time-series are available from 1950. Comparing these emerging countries with non-emerging countries, it shows that initial education policies have played a critical role in takeoff. External assistance has not played a significant role. JEL Classification: O11

Suggested Citation

  • Jean-Claude Berthélemy, 2006. "Convergence Clubs and Multiple Equilibria: How Did Emerging Economies Escape the Under-Development Trap?," Revue d’économie du développement, De Boeck Université, vol. 14(5), pages 5-41.
    • Handle: RePEc:cai:edddbu:edd_205_0005
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    Citations

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    Cited by:

    1. Rockerbie, Duane & Easton, Stephen, 2021. "Multiple Equilibria and Unsustainable Runs in Major League Baseball: More Evidence," MPRA Paper 109971, University Library of Munich, Germany.
    2. Ouyang, Yusi & Shimeles, Abebe & Thorbecke, Erik, 2019. "Revisiting cross-country poverty convergence in the developing world with a special focus on Sub-Saharan Africa," World Development, Elsevier, vol. 117(C), pages 13-28.

    More about this item

    Keywords

    under-development; multiple equilibria; convergence clubs; education policies;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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