Catching Up and Falling Behind: Economic Growth in the Twentieth and Twenty-First Centuries

This chapter explores the dynamics of economic growth in the twentieth and twenty-first centuries, emphasizing the interplay of modern growth theories and their applicability to varying regional contexts. It examines key growth patterns, including technological innovation, capital accumulation, and efficiency improvements, using examples from different areas within Eurasia. The chapter integrates insights ranging from growth models such as Solow-Swan, Lucasian, Romerian, and endogenous growth theories to a multivariate explanation of growth by various drivers of economic expansion, particularly highlighting human capital’s dual role in enhancing efficiency and fostering innovation. These growth factors can be distinguished in long-run institutional, external, and internal and short-run factors. Indeed, in-depth analyses of institutional frameworks and social actors, external factors such as convergence, and structural transitions illustrate their critical roles in shaping growth trajectories. First, case studies of China, Russia, and Southeast Asia reveal the importance of state-led development, institutional borrowing, and labour market dynamics in overcoming structural inefficiencies and achieving sustained growth. Second, the chapter also investigates external factors, such as global economic divergence and convergence, through the lens of World Systems Theory (WST), illustrating how international trade, technological diffusion, and geopolitical influences affect regional growth patterns. Third, internal factors such as capital investment, demographic shifts, and labour-force dynamics are scrutinized to understand their impact on economic resilience and sustainability. The discussion includes the implications of recent technological revolutions, including the Fourth Industrial Revolution and AI, and their uneven effects on global economies. This comprehensive analysis underscores the complexity of economic growth, shaped by a confluence of long-term, external, and internal factors, and highlights the need for adaptive, context-specific policy interventions.