Thread by @Noahpinion

1/Let's talk about global development.

Is the Global South catching up to the Global North?

Yes. Though not evenly.

noahpinion.substack.com/p/checking-in-…

2/Here's Wikipedia's picture of the Global South.

Basically, it looks like "countries that were developed around the year 2000".

The big question: Will this picture change?

3/Economic models predict that poor countries should catch up to rich ones.

But plenty of econ research in the 90s showed that hadn't happened yet.

dash.harvard.edu/bitstream/hand…

econ.nyu.edu/user/debraj/Co…

4/What was holding the developing world back? Was it neocolonialism? Bad institutions? That was what everyone was asking all the way up through the 2000s.

But by the 2000s, something had changed.

5/As @arvindsubraman and others pointed out, the relationship between income and growth, at the country level, turned negative in the 90s. That means the poorer a country was, the faster it grew.

That was new.

voxeu.org/content/everyt…

6/And note that this isn't just about China either, or China and India. This isn't weighted by population, so China and India are just two data points...

7/Anyway, here's a paper formalizing the result.

The authors also find that there's no "middle income trap". In recent decades, middle-income countries have grown faster than rich OR poor ones!

cgdev.org/sites/default/…

8/Here's another recent paper finding the same thing. These authors find that convergence has been gathering steam since the 60s -- in other words, since decolonization.

scholar.harvard.edu/yangyou/public…

9/The simple story here is that decolonization worked!

10/But that's too simple a story.

The fact is, not all parts of the Global South are catching up equally.

11/So let's talk about one of the regions of the Global South that IS catching up quickly: Southeast Asia.

bloomberg.com/opinion/articl…

12/Compare the steady exponential growth of EVERY COUNTRY in Southeast Asia to the halting, inconsistent, slower growth of many other developing countries.

13/Every single Southeast Asian country appears to be on a smooth exponential growth curve.

That implies something deep and underlying here. Something regional, rather than country-specific.

14/My guess is that Southeast Asia is benefitting from the general shift of economic activity and supply chains to Asia.

That shift depends a little on countries' industrial policies, but really it's about vast global economic forces.

15/Now keep in mind, many these countries are still poor. So their growth will have to hold up for at least three decades or so in order to bring them out of poverty.

But Thailand and Indonesia are ahead of the pack, and Malaysia is practically a developed country now.

16/In fact, Malaysia's success bodes well for the entire region. Other than the city-state of Singapore, Malaysia is the first Southeast Asian country to industrialize.

bloomberg.com/opinion/articl…

17/So does Malaysia get to be in the "Global North" now?

Will Indonesia and Thailand get to be in the Global North when they reached developed status?

Or will the whole concept of Global North and South lose some of its relevance?

18/If Southeast and South Asia are both finally on the escalator of catch-up growth, then that leaves just one region languishing in poverty: Africa.

Whether Africa can industrialize is thus the great looming question of development economics now.

noahpinion.substack.com/p/all-futurism…

19/But saving that question for another day, let's celebrate the fact that poor countries are finally catching up to rich ones.

It took a while, but the legacy of colonialism is finally starting to give way to the relentless forces of economics.

(end)

noahpinion.substack.com/p/checking-in-…

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