Poor grow faster than rich

Economics Focus in “The Economist” magazine recently looked at developing countries and reasons why they may grow at a faster rate than their developed counterparts. Robert Barro at Harvard says that this will be the case if:
– the rule of law prevailed
– the terms of trade were favourable
– inflation and government wastefulness remained in check
– families are small in number
– population are health and educated

Goldman Sachs takes the BRICs’ income per person, relative to that of America, as a proxy for their economic backwardness. The bigger the gap, the greater the potential for catch-up growth. The bank also assumes that countries differ in how well they exploit this potential. Some absorb know-how from abroad quicker than others. Their “convergence speeds” would vary, even if the distance they had to cover were the same. The Economist December 10th 2011

The World Bank now rates and ranks emerging economies on such attributes as:
– openness to trade
– corruption
– the diffusion of mobile phones

In 2003 it was estimated that Brazil’s GDP would overtake Italy by 2025 and China would overtake Japan by 2015. Both these countries overtook their above counterparts by 2010. Emerging economies will become the engines of growth in the world economy.

2 thoughts on “Poor grow faster than rich

  1. David Parr

    The inclusion of mobile phones as an attribute is interesting, as they seem to have been a vital element in combatting / exposing corruption in repressive regimes. Similarly, in their own small but ever-expanding way, they help in opening trade in restrictive regimes because they operate outside the normal means of communication which those regimes can control, thus enabling operators to access markets which otherwise might be denied. In the hands of many they can be a powerful, disruptive force.

    Reply
    1. Mark Post author

      Interesting to see that the World Bank has embarked on a general survey of issues related to the use of mobile phones in education in developing countries. The study hopes to riase awareness of using the mobile phone for educational objectives – what next? an iPad project?

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *