Overview: The Division of the World
SELECTION II.1. THE SPREAD OF ECONOMIC GROWTH TO THE THIRD
Comment II.1. State-owned Enterprises and Privatization
SELECTION II.2. THE DIVISION OF THE WORLD AND THE FACTORAL
TERMS OF TRADE
Note II.1. Why Not Export First?
Note II.2. The Lewis Model of the World Economy
SELECTION II.3. AGRICULTURAL PRODUCTIVITY, COMPARATIVE
ADVANTAGE, AND ECONOMIC GROWTH
Comment II.2. Income Elasticity of Demand for Food in the Matsuyama
SELECTION II.4. INCOME DISTRIBUTION, MARKET SIZE, AND
Comment II.3. Minimum Market Size in the Murphy–Shleifer–Vishny Model
SELECTION II.5. FACTOR ENDOWMENTS, INEQUALITY, AND PATHS OF
DEVELOPMENT AMONG NEW WORLD ECONOMIES
SELECTION II.6. DIVERGENCE, BIG TIME
Comment II.4. Will the Poor Countries Catch Up?
In order to analyze the problems of contemporary poor countries it is essential to understand how they became “less developed” than today's rich countries and how they have attempted to catch up. The main focus of this chapter is on the division of the world into agricultural and industrialized countries, with the latter located until recently entirely outside the tropics.
The first selection, by Lloyd Reynolds, examines economic growth of large countries (1980 population at least 10 million) in Asia, Latin America, North Africa and the Middle East, and sub-Saharan Africa during the period 1850–1980. Reynolds begins by noting that prior to this period many countries in these regions had for a century or more been experiencing what he calls “extensive growth,” meaning growth in output that is absorbed by growth in population, leaving per capita income unchanged. He argues that developments during the period of extensive growth provided “important conditioning factors” such as nation-building for later growth in per capita income. When this “intensive growth” began in many countries during the “world economic boom” from 1850–1914, it was invariably led by exports of primary products to Europe and North America. This was by no means inevitable, since many countries in Western (but not Central) Europe responded to the industrial revolution that began in Britain