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Economic Integration and Income Convergence: Not Such a Strong Link?

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  • Branko Milanovic

    (Development Research Group, World Bank and Carnegie Endowment for International Peace)

Abstract

We would expect that the process of globalization between 1870 and 1914 and subsequent disintegration of the world economy during the interwar period would have led first to income convergence and then to income divergence between the participating countries. But in fact we find stronger evidence for income convergence during the interwar period than during the first globalization. Similarly, the average level of import protection in the world cannot be shown to have either helped or hampered convergence. The evidence for trade-induced convergence is therefore weak. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Branko Milanovic, 2006. "Economic Integration and Income Convergence: Not Such a Strong Link?," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 659-670, November.
  • Handle: RePEc:tpr:restat:v:88:y:2006:i:4:p:659-670
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    Cited by:

    1. Xuepeng Liu, 2009. "Trade and income convergence: Sorting out the causality," The Journal of International Trade & Economic Development, Taylor & Francis Journals, pages 169-195.
    2. J. Paul Dunne & Nicholas Masiyandima, 2017. "Bilateral FDI from South Africa and Income Convergence in SADC," African Development Review, African Development Bank, pages 403-415.
    3. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    4. repec:gen:geneem:12302 is not listed on IDEAS
    5. Stefan Sperlich & Yvonne Sperlich, 2012. "Growth and Convergence in South–South Integration Areas: Empirical Evidence," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 12032, Institut d'Economie et Econométrie, Université de Genève.
    6. Arribas, Iván & Pérez, Francisco & Tortosa-Ausina, Emili, 2008. "On the Dynamics of Globalization," MPRA Paper 16007, University Library of Munich, Germany, revised 2008.
    7. René Cabral & André Mollick, 2012. "Mexico’s regional output convergence after NAFTA: a dynamic panel data analysis," The Annals of Regional Science, Springer;Western Regional Science Association, pages 877-895.
    8. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
    9. Iván Arribas & Francisco Pérez & Emili Tortosa-Ausina, 2014. "The dynamics of international trade integration: 1967–2004," Empirical Economics, Springer, pages 19-41.
    10. Nicholas Apergis & Arusha Cooray, 2016. "Old Wine In A New Bottle: Trade Openness And Fdi Flows—Are The Emerging Economies Converging?," Contemporary Economic Policy, Western Economic Association International, vol. 34(2), pages 336-351, April.

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