Conditional Divergence in the Post-1989 Globalisation Period

This paper shows that conditional convergence in per capita income, as a robust empirical regularity across countries, may have dissipated in the post-1989 globalisation era. There is evidence of conditional divergence over the period 1990-2016, with growth-reducing structural change emanating from greater trade openness and a slower rate of technology catch-up in developing countries identified as potential explanations. The results further show that conditional divergence can only be ceased subject to some initial, efficiency-adjusted level of educational attainment. One implication of conditional divergence is that the growth accelerations observed in many developing economies since the late-1990s may not be sustainable.