Abstract

Deepak Nayyar observes that, during the past 25 years, there has been a significant increase in the share of developing countries in world output, manufacturing and trade. This catch up, in aggregates, has been driven by economic growth. But the process is characterized by uneven development and emerging divergences. There is an exclusion of regions, of countries within regions, of regions within countries, and of people, leading to increasing divergences within the developing world. Asia led the process, while Latin America stayed roughly where it was, and Africa experienced regress. Nayyar formulates two interlinked hypotheses. Economic growth (catch-up) is essential for reducing inequality (between and within countries), but at the same time it will be unsustainable without reducing inequality (within countries). He concludes that catch up can reduce inequality. If it does not, there will be no catch up.