Thread by @Noahpinion

Today's @bopinion post is about how poor countries started catching up to rich ones.

It looks like decolonization just took a few decades to start working.

bloom.bg/2yKQWGQ

Basic econ theory says poor countries should grow faster than rich ones.

But for much of the Industrial Revolution, the opposite happened.
econ.nyu.edu/user/debraj/Co…

Why? Probably because the first countries to discover industrial technologies used them to conquer the others!

But then colonial empires went away. And yet still, for the next 30 years or so, poor countries fell further behind rich ones.
dash.harvard.edu/bitstream/hand…

Why??

Possible reasons:
1. Bad institutions (dictators, communism, autarkic trade regimes)
2. Civil wars
3. Lack of education

But then, starting in the 80s (for China) and the 90s (for India and Indonesia), some of the biggest poor countries got their acts together and started to catch up!

Global inequality began to fall.

Beginning in the 1990s, poor countries started to grow faster than rich ones. The pattern intensified in the 2000s.
brookings.edu/opinions/the-f…

Outside of Africa, which was rocked by many huge wars in the 90s, the pattern was even stronger. Poor countries were catching up.

https://twitter.com/HannesMalmberg1/status/1052002749762691073

In the 90s, natural resource prices were low, so many resource exporters didn't get to join in the growth party.

In the 00s that changed, as resource prices started rising.

Then the Great Recession halted rich-country growth, but didn't halt poor-country growth.

Now, some economists are starting to entertain a wild, hopeful notion:

What if the facts are finally catching up to basic economic theory??

cgdev.org/blog/everythin…

Now that growth theory finally (sort of) works, the world will be a changed place.

Inequalities won't vanish for a long time. But no longer will a few rich countries get to lord it over the rest of the world.

The days of colonialism are done for good.

(end)