Abstract
Sustained and rapid income growth is a modern phenomenon that appeared only after the Industrial Revolution in the eighteenth century. Before that time, for a long period, almost all countries in the world had agrarian economies, and the income gaps among countries were small. The Industrial Revolution led to accelerated growth in the Western European economies, the United States, and other Western offshoots, but most other countries failed to do so (Maddison 2010). As a consequence, there has been great divergence in income levels between developed and developing countries. By the end of the twentieth century, the gap had significantly widened, with per capita income of industrialized countries at more than 50 times that of low-income countries (Maddison 2010). Among the set of developing countries, only a handful were successful in transforming their agrarian economies into an industrialized one. Among them were Japan and the East Asian tigers.
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Notes
- 1.
The 2010 OECD study also shows that extreme poverty persists in many parts of the world, despite the fact that world gross domestic product (GDP) has increased by roughly 60 % since 1992. Based on cross-country comparisons, a number of papers in the literature have found that measures of absolute poverty tend to fall with economic growth (Montalvo and Ravallion 2010).
- 2.
- 3.
- 4.
The term public good is often used to refer to goods that need to be supplied or at least be promoted by government because the private sector tends to undersupply them. This is due to the fact that a market is missing (such as with clean air) or there are severe market imperfections (such as preventive care or primary education) that prevent private firms from being paid enough to induce them to supply public goods at socially desirable levels.
- 5.
See full paper by Lin (2010b).
- 6.
See Zi (2011).
- 7.
See OECD (2009).
- 8.
See OECD (2011).
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Wang, X., Wang, L., Wang, Y. (2014). Introduction and Overview. In: The Quality of Growth and Poverty Reduction in China. International Research on Poverty Reduction. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36346-7_1
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