Dev Patel, Justin Sandefur, and Arvind Subramanian
The Berlin Wall’s fall was a unique moment in geopolitical history, ushering in an era of unipolarity as the United States became the world’s hegemon. But it also heralded an unprecedented economic phenomenon: convergence. As early as the fifteenth century, formerly prosperous societies from Mesoamerica to China suffered reversals of fortune, falling—or being pushed—behind the West. With the advent of the Industrial Revolution, growth rates in rich and poor nations diverged even further. But as the Cold War drew to a close, this grim historical pattern broke, and developing countries started growing faster. Within another decade, they began catching up, albeit slowly, with living standards in the rich West.
Some poorer economies had already experienced success in the twentieth century—South Korea and Taiwan prospered beginning in the 1960s, followed by Indonesia, Hong Kong, Singapore, and Thailand. But the era of convergence that began around 1990 stands out for its ubiquity of remarkable growth, extending to a plurality of developing countries. As a group, they started reversing their previously bleak economic fortunes. The world saw a historic decline in poverty not just in China and India but also in Latin America and, starting in the mid-1990s, in sub-Saharan Africa.
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