Abstract
The economic history literature on income convergence between and across countries (particularly in those of the west) acknowledges the existence of two distinct chronological periods after the Second World War (WWII): 1950–1973 is seen as being the “golden age” in which both income convergence and distributional convergence took place. By contrast, the “post-golden age” period is characterized by distributional divergence and polarization, with, on average, the rich countries getting richer, and with far less mobility across income groups within the different countries, than in the previous period. When appraising convergence at the intracountry level, the “post-golden age” period also corresponds to a period during which social movements have flourished, particularly in the case of Europe. This chapter builds on previous analyses by studying convergence (or divergence) in the long term and in the case of a number of selected Asian countries compared with the case of the European Union. In doing so, it goes beyond the traditional concept of economic convergence by including sociological indicators such as life expectancy. Consequently, this chapter analyzes socioeconomic convergence during a period which starts with decolonization and which spans beyond the Asian crisis (1997–1998), the latter being considered as a structural break in terms of Asian growth. New trends delineated in the background of the current crisis will also be analyzed.
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Notes
- 1.
The 27 (+ Vietnam North and South) participating countries in the Bandung Conference are referred to here as the “Bandung countries.”
- 2.
Other indices have been devised, such as the Genuine Progress Index, or Index of economic well-being (for more on this, see Osberg and Sharp 2002).
- 3.
See Appendix 2.1 for a list of countries encompassed in each group.
- 4.
Structural change typically manifests itself by the movement from the mineral and agricultural sectors to the manufacturing and services sectors.
- 5.
The explanations for the dismal socioeconomic performance in Africa (and particularly for slow growth) can be grouped into four different categories: country-specific characteristics, degree of openness (defined by the exports + imports to GDP ratio), lack of capital, and others causes.
- 6.
As is shown in the sociology and political science literature on the issue, there is a strong link between inequality on the one hand and violence on the other. According to this literature, poverty, rather than inequality per se, seems to impact more on social cohesion. On the issue of social capital and inequality, the interested reader can refer to Putnam (2000).
- 7.
The World Bank acknowledges the fact that previous data had underestimated the cost of living in most developing countries. Poverty lines used by the World Bank also refer to $10 a day in the case of poverty in a wealthy country, such as the United States.
- 8.
This definition holds for the household as the reference unit of analysis, by taking into account its composition; therefore, the data are “equivalized.”
- 9.
These figures are from the EU Statistics on Income and Living Conditions (EU-SILC) for 2007.
- 10.
Note that the USA has the largest gap between rich and poor compared to all other industrialized nations, with this gap being the widest in 70 years.
- 11.
The Gini coefficient is the most well-known measure of (income) dispersion. Based on the Lorenz Curve which relates the percentage of total income earned to the percentage of a given population, cumulated from the poorest to the richest, it is calculated as the area lying between the line of perfect equality (diagonal) and the Lorenz curve: the higher the coefficient, the higher the level of inequality.
- 12.
These figures are from the Eurostat New Cronos database; Eurostat, online database and Eurostat/EU-SILC. July 2010.
- 13.
Note that some countries, such as Ireland, appear quite favorably under this criterion. This is due to the downward revision (more than 15 %) of the “at risk of poverty” threshold in purchasing power parity terms in these countries since 2008. Some of this downward revision can be explained by low inflation rates and by deflationary tendencies since the beginning of the crisis (−1.6 % in 2010 in Ireland).
- 14.
The Theil entropy index borrows from information theory and measures nonrandomness or inequality. Its main advantage is that it can be decomposed into several groups of individuals, and that it allows therefore to measure within-groups as well between-groups inequality.
- 15.
As a proxy for children’s rights, we use 1 minus the proportion of children aged 10–14 in the labor force.
- 16.
Sigma convergence simply refers to the coefficient of variation (CV), which is simply equal to σ/μ. In its most standard form, it is measured as the unweighted coefficient of variation of per capita income. Beta convergence is obtained by regressing the growth rate of per capita incomes against its initial levels (see, e.g., Barro and Sala-i-Martin 1992; Ben-David 1994). A negative relationship between initial GDP per capita and growth rates denotes convergence.
- 17.
Note that because of the lack of data, Ethiopia and Libya are not included in the calculations.
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Andreosso-O’Callaghan, B. (2013). Economic Change and Social Dynamics: Converging and Diverging Trends Across Different Economies. In: Andreosso-O'Callaghan, B., Royall, F. (eds) Economic and Political Change in Asia and Europe. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-4653-4_2
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