Pritchett, Lant. 1997. "Divergence, Big Time." Journal of Economic Perspectives, 11: 3 (Summer): pp. 3-17.
Doug Henwood wrote:
> Michael Pollak wrote:
>
> >PS -- By the way, who is Lant Pritchett? That's not just some fancy code
> >for "Larry Summers is a Prick" is it? :o)
>
> Pritchett, a World Bank economist, has a very interesting 1995 paper called
> "Divergence, Big Time," which I wrote up in LBO shortly after it came out.
> Here's the abstract, from
> <http://www.worldbank.org/html/dec/Publications/Workpapers/wps1522-abstract.html
> >. The full paper is at
> <ftp://monarch.worldbank.org/pub/decweb/WorkingPapers/WPS1500series/wps1522/>.
> Doug
>
> ----
>
> 1522. Divergence, Big Time
>
> Lant Pritchett
> (October 1995)
>
> The basic fact of modern economic history is massive absolute divergence in
> the distribution of incomes across countries. This paper shows that even
> without actual historical data on incomes in the now poor countries we can
> reasonably estimate that the ratio of the incomes of the richest to the
> poorest countries increased at least sixfold between 1870 and today.
>
> Recently, much attention has been paid in the literature on economic growth
> to the phenomenon of "conditional convergence," the tendency of economies
> with lower-level incomes to grow faster, conditional on their rate of
> factor accumulation.
>
> Pritchett documents that, regardless of conditional convergence, perhaps
> the basic fact of modern economic history is massive absolute divergence in
> the distribution of incomes across countries.
>
> Discussions of long-run convergence or divergence have been hindered by the
> lack of reliable historical estimates of per capita income for poor
> countries. Pritchett shows that to draw reasonable inferences about whether
> incomes have converged or diverged does not require historical estimates of
> per capita income as a plausible lower limit for historical per capita
> incomes combined with estimates of current income in poor countries places
> a binding constraint on their historical growth rates.
>
> Pritchett estimates that between 1870 and 1985 the ratio of incomes in the
> richest and poorest countries increased sixfold, the standard deviation of
> (natural log) per capita incomes increased by between 60 and 100 percent,
> and the average income gap between the richest and poorest countries grew
> almost ninefold (from $1,500 to over $12,000).
>
> This paper --- a product of the Office of the Vice President, Development
> Economics --- was prepared as a background paper for World Development
> Report 1995 on labor. Copies of the paper are available free from the World
> Bank, 1818 H Street NW, Washington, DC 20433. Please contact Sheila Fallon,
> room N8-030, telephone 202-473-8009, fax 202-522-1153, Internet address
> sfallon at worldbank.org. (42 pages).
-- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu