Economic convergence

[peter0425]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

[Alpha Marine]

If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

Those countries are not poor because they don't have the resources to transform their situation; they're poor because they have leaders who only care about themselves and a system that cannot check how the people in power and other positions carry out their duties.
I believe the theory is true to an extent, but only for countries that actually have leaders who want to make their country better. It's pretty easy to make a country grow in today's world if that country has the right leaders. Different technological innovations have been invented; all they have to do is use them in their countries without having to think about it themselves. They will not be on the same level as the top countries, but the country will definitely be better and no longer poor. In my opinion, all a country needs to not be a poor or developing country are the right leaders and a proper and working system.

[Dunamisx]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones.

No, I disagree with this one, it doesn't happened like that, because if it does, then most of the developing and underdeveloped countries would have all turned to advanced a d developed nations, but things don't work like that, we only see to understand more when they have better economy.

why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

It all depends, we can't compare someone with higher experience to another just starting, even if the economy is perfect running, they may not be able to catch up with the already established countries because of their achievements.

[Fortify]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

You can find plenty of examples out there, just look at China - when it decides to drop backwards socialist policies enforced on it by chairman Mao it has been able to grow exponentially following the semi capitalist model. It's crazy to think how poor it was just a few decades ago and how much wealth it has generated since then, especially for such a high population country - but one that is fairly socially cohesive and has varied but also favorable land conditions. However there are plenty of countries that are mismanaged by their leaders or have so many inter-warring factions vying for power they end up in a fragmented and clan based situation, unable to effectively pool resources or extract the best value, often being manipulated by more powerful outside forces to maintain that chaos.

[retaur]

During the pandemic in the UK there was a spike in demand for PPE (facemasks, visors and aprons etc). The UK is a large producer of plastic and as such started mass producing the things needed and had a functional supply to meet demand within a few months.

The difference between poorer countries and richer ones is that richer ones usually have diversified resources, stronger security (economically and physically) and have a limited amount of corruption (those who are corrupt and up prosecuted or hide it so well it's hard to spot - for the most part). They also have the infrastructure to transport anything anywhere efficiently. A country that imports a lot of goods and exports a lot of services (typical of developed nations) have a lot of empty ships leaving so it makes sense shipping goods out of a developed country could work out cheaper than shipping them into one from a less developed nation.

[summonerrk]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

It's the other way around. People from poor countries move to rich ones to find better jobs and living conditions. It's hard, but there are smart teenagers and young adults ready for this adventure, and it's truly worth it. That's why rich countries attract high-quality migrants.
And in poor countries, this makes things even worse. This is called the "brain drain," and it explains why the United States is home to the smartest people in the world, and why this migration continues. But poor countries need to improve their conditions to prevent this from happening.

[₿itcoin]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.
But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

Yes, you have reason to doubt it. Economic convergence looks nice on paper, poor countries will gradually catch up with rich countries in technology, job packages, they will improve, but the reality is often more complicated. Countries like South Korea, Singapore etc. have succeeded, but many developing countries still have problems, corruption, weak governance, bad policy-making, they are stuck.

You can't just copy-paste new technology & innovation to solve all the topical problems. the system around a country, the laws, the markets &  the educational qualifications of the people, all have to be in place. If these things dont happen, then there will only be big talk, with little real gains.

So in my opinion, convergence will happen, but only if countries build strong institutions, improve peoples education & skills, also properly utilize technology &  knowledge transfer. Otherwise, it will become just another economic fantasy, not a reality LoL

[davis196]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

You are probably reading something wrong. There's no labor migration from rich countries to poor. It's the opposite.
Migration of skilled workforce from poor to rich countries is called "brain drain" and it stops the economic growth of the poor countries.
Poor countries remain poor because they can't get out of the "poverty trap"(insufficient investing in the educational system), corruption, bad business environment, not enough foreign investments, bad infrastructure, bad healthcare system, etc.
Poor countries have cheap labor, which can bring a competitive edge, if the workforce was skilled and disciplined, which is not the case in most underdeveloped countries.

[abhiseshakana]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

The basic concept of economic convergence emerges from neoclassical growth theory, which essentially embodies the expectation and reality that poor countries will grow faster than rich countries due to diminishing returns to capital, ultimately leading to a convergence of per capita income. Ideally, convergence is absolute, where all countries reach the same income level if their fundamental structures are identical. However, this rarely occurs in reality due to differing initial conditions. What is possible is conditional convergence, where poor countries can catch up with rich countries if they have similar policies, institutions, and education.

The reality of the modern economy is that the world is no longer linear; it is an era of globalization and structural friction. Globalization should bring efficiency, allowing capital, technology, and labor to move freely, creating growth worldwide. However, the reality is that the global economy operates asymmetrically, with developed countries still monopolizing technology, data, and financial capital, while developing countries remain providers of cheap labor and sources of raw materials. Instead of convergence, the world is facing structural divergence, where the gap between rich and poor countries is widening in new dimensions: digital, innovation, and infrastructure.

Furthermore, GDP growth does not always reflect real prosperity. Many economies grow through the financial sector (stock markets, derivative instruments, and digital assets) without increasing real productivity. This results in asset inflation, wealth accumulating among a handful of capitalists, real wage stagnation, and the underprivileged underserved. In other words, a pseudo-economic phenomenon resulting from financial capitalism has emerged.

Economic convergence will not occur, or will be very, very slow because:
- State institutions are predominantly plagued by corruption, collusion, and nepotism, with slow bureaucracies and weak laws, making it difficult to utilize global capital and technology, resulting in unproductive investment.
- The technological divide is deepening, with rich countries continuing to innovate (AI, green energy, biotechnology), while poor countries become consumers of finished products. This R&D imbalance widens the productivity gap.
- Path Dependence: Economic Structure Lock-In (Path Dependence) where commodity-exporting countries struggle to transition to manufacturing or digitalization because their infrastructure, human resources, and global value networks are already locked in.
- The final and most serious issue is the dominance of global currencies and finance (USD-centric), making developing countries dependent on foreign capital and vulnerable to capital outflows. The global financial crises (1997, 2008, and 2020) demonstrated that global volatility spreads more quickly to poorer countries.

What has emerged this decade is not economic convergence, but rather a new form of digital convergence. Internet access, AI, and blockchain are creating new opportunities to catch up without large physical infrastructure. However, the effect is dualistic: countries or individuals who master technology advance; those left behind are left further behind, creating a phenomenon of divergence within countries, not just between countries.

In my opinion, the world appears to be heading towards two possibilities: neo-convergence, through the digital economy, open global education, and financial decentralization, for example through cryptocurrency. Second, global economic fragmentation due to trade wars, new economic blocs (BRICS vs. G7), and increasingly stringent technology controls. These two directions are currently competing in a new geoeconomic order. Therefore, the world has not yet experienced true economic convergence. What is happening is fragmented convergence, with some regions advancing, others lagging behind, depending on their structural adaptive capacity and ability to manage the digital transition.

[peter0425]

The difference between poorer countries and richer ones is that richer ones usually have diversified resources, stronger security (economically and physically) and have a limited amount of corruption (those who are corrupt and up prosecuted or hide it so well it's hard to spot - for the most part). They also have the infrastructure to transport anything anywhere efficiently. A country that imports a lot of goods and exports a lot of services (typical of developed nations) have a lot of empty ships leaving so it makes sense shipping goods out of a developed country could work out cheaper than shipping them into one from a less developed nation.

I’m not convinced that there’s absolutely no country without any ounce of corruption. Greedy politicians exist everywhere not just in poor countries. Maybe greedy politicians exist more in poor countries and that’s why they are poor. I guess the theory of economic convergence forgot to include the factor that is corruption which is essentially what kills any hope for growth.

[Ruttoshi]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

The colonies of those poor countries wouldn't allow it to happen because they will still want to control the government of that poor country that they colonized in one way or the order. Corruption is a hinderance to economy convergence because the leaders wouldn't want the country to grow for everyone's benefit. Rather, they prefer to worsen the economy of the country through taking of loans from a bigger country and squander the money without doing anything with it.

My country is an example, they have enough natural resources endowed by nature but the government doesn't care about making proper use of these resources in the right way to improve the economy of the country. Instead, the leaders are causing more hardships for the citizens.

[Findingnemo]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

Let me give you an example, if there is a game with stage 1 to 100 and assume developed country in stage 90 and developing country in stage 20 so if both of them move 5 stages ahead we see their growth in same or we can conclude that moving stage 90 to 95 is a lot harder than moving from 20 to 25 so yes it is true richer country may have lesser growth in terms of percentage because they are already upto their potential.

[Mhizlove]

If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

I'm glad you asked that question because you're not the only one who's confused by this. The theory of economic convergence seems promising theory but in reality its more complicated.
Economic convergence is said to be  poor countries that want to grow faster than the right ones and at some point catch up. In theory it makes a lot of sense because they attract investment , borrow technology and they leverage the experiences of more develop nations. But in reality it's more complicated than that, numerous countries stays poor because face alot of obstacles, the institutions are weak, the education system is poor, global system is unfair, corruption and many more. It's like trying to complete when you are ill prepared while others have the top gear. Some countries like south Korea have bridged the development gap with strong leadership, time and smart policies.
So I will say yes,  convergence does happen but not for everyone but it's only happens when the right piece are in place and that's only possible if the fundamental challenges are resolved.

[Fiatless]

It's the other way around. People from poor countries move to rich ones to find better jobs and living conditions. It's hard, but there are smart teenagers and young adults ready for this adventure, and it's truly worth it. That's why rich countries attract high-quality migrants.
And in poor countries, this makes things even worse. This is called the "brain drain," and it explains why the United States is home to the smartest people in the world, and why this migration continues. But poor countries need to improve their conditions to prevent this from happening.

Investors from rich nations move to poor nations to exploit raw materials. That's why many multinationals from China, Russia and some Western countries are investing heavily in Africa. It is common to see nationals of these nations migrating to developed nations to take up jobs. These companies make lots of profit because they can easily take advantage of inexperienced and corrupt leaders in developing nations.

I have not heard about the economic convergence theory but I accept its positions. Developing nations can easily develop by copying or stealing technologies or ideas from developed nations.  Ideas or discoveries that took developed nations years to develop can be adopted by developing nations within a short period.

[tabas]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

This might be real but it takes time for a poor country to get out of it and then have that economic convergence that we're talking about. The poor countries remain poor because of poor leadership. It's embedded in the history and roots of the country and that's why they remain there. But countries like Singapore & South Korea were once poor countries but because of good leadership and strong political will of their former leaders, the countries are the now one of the strongest economies in the world. So, it didn't took them a long time before their economy have changed and become better.

[retaur]

I’m not convinced that there’s absolutely no country without any ounce of corruption. Greedy politicians exist everywhere not just in poor countries. Maybe greedy politicians exist more in poor countries and that’s why they are poor. I guess the theory of economic convergence forgot to include the factor that is corruption which is essentially what kills any hope for growth.

By hiding corruption well I mean they don't do anything that's too obvious.

If a politician in a wealthy country claims $200 million, they obviously can't spend that quickly and are going to get noticed if they do (even sometimes they'll get noticed for claiming that amount).

Now compare it to $100k-4 million in the same country, sure they might raise some red flags but they likely don't need to prepare for a full investigation because the authorities will considered they'll spend more investigating it than they will actually leaving it where it is so they'll drop or close the case as it reaches them.

Nowhere is free of corruption but some places are smart enough to try to get rid of it and some people have enough of a conscience to collectively report individuals too and keep their own records clear. The more people corrupt in a government, the harder it is for anyone to stamp it out especially as the corrupt ones usually end up with ore power, more money and more resources.

[Josefjix]

Economic convergence is a theory that poorer countries have the ability to grow faster than richer ones. A factor why is migration of labor from rich countries to poorer ones. Another is technology transfer. While rich countries innovate and develop, the poor countries copy and adapt enabling them to catch up without needing to make the innovations themselves.

But after reading this, I wondered if this theory is real. Maybe it is for some countries but for mine it is definitely not. If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

Was China a poor or rich country before?
If your answer is yes, then economic convergence exists. If NO, then how come we heard about China been poor before overtaking slowly today.

I truly believe in this theory to work in some certain countries and not African countries precisely.

The major reasons and the kind of mindset as well as the strong unity for this theory to be successful will actually come from a nation that's fully matured and understanding.

[Darker45]

I didn't delve deep into what the theory is really about, but from the quick browsing that I've done, it seems it's a theory that's detached from reality. Strictly speaking, it shouldn't even be considered a theory. Is it even validated? Is there a body of evidence that supports it?

To me, the disparity is far from reduced. On the contrary, it appears it's even widening further and further. What catching up are they talking about?

Rich countries are already sending people outside the world to conduct research extraterrestrial stuff while poor countries can't even manage to provide early childhood education. Rich countries are already into air taxis while people in poor countries can't even afford slippers. Convergence my foot!

[laijsica]

If economic convergence is real or applicable to a lot of countries, why poor countries remain poor or fail to actually exceed past the rich countries? What do you think? Is this theory real or no?

Due to the lack of wealth in poor countries, labour is seen migrating to rich countries. Since the rich countries own the technological resources, they sell them at high prices and send skilled manpower to maintain these technological equipment. Sending forces for their security is a strategy to keep poor countries more dependent on each of these things.

By keeping them dependent on rich countries, they use many strategies, including employing skilled people from poor countries at high wages in their countries so that skilled educated people do not emerge in those poor countries and cannot improve in terms of technology. A kind of centripetalism due to which rich countries become richer and poor countries cannot improve.

[DanWalker]

I’m not convinced that there’s absolutely no country without any ounce of corruption. Greedy politicians exist everywhere not just in poor countries. Maybe greedy politicians exist more in poor countries and that’s why they are poor. I guess the theory of economic convergence forgot to include the factor that is corruption which is essentially what kills any hope for growth.

Greed is part of being human and we all have greed, not just politicians. So where there are people, there will be corruption. But the difference between countries is that developed countries often have strict and tough regulations in fighting corruption. Meanwhile, developing countries often have looser regulations and politicians collude with each other to commit corruption. It will make corruption worse and people's lives more miserable.

If you want to know the corruption index of each country, you can check it out here.


https://worldpopulationreview.com/country-rankings/corruption-perceptions-index-by-country