# 1. Introduction

Since 1990 economic growth in Sub-Saharan Africa has averaged just 0.8% annual growth in per capita income. By comparison, global growth rates over the same period were double that, and regions like East Asia scored per capita growth rates of more than 6% per annum.<sup>1</sup> This anemic growth record saw African economies and other slow growing lower income countries’ incomes slipping further behind the rest of the world. Meanwhile, the number of Africans living in poverty – measured using the global poverty line – has grown by tens of millions since 1990. In contrast, countries like China have averaged per capita growth of around 7.6%, lifting over 750 million people out of poverty.<sup>2</sup> If current trends in economic growth and poverty rates persist, a large group of low income, slow growing or stagnant economies, found mostly in Africa, will never eradicate extreme poverty, nor will they catch up to the rest of the world. Furthermore, the number of those living in extreme poverty globally is set to begin to rise again by 2035 after decades of decline.

What can explain this extraordinary divergence in economic destiny? What might the implications be for the twenty-first century? And why is documenting this divergence so important for informing policy? In this paper we examine these questions and offer reflections on the measurement of economic divergence. We also consider why this finding is not more widely understood. Indeed, various studies over the past two decades have drawn the opposite conclusion – namely that world incomes are converging, and that the evidence supports a finding of ‘unconditional convergence’ – specifically that the overall result is one of convergence regardless a country’s starting point. For example, ‘The New Era of Unconditional Convergence’ argues that the era of _unconditional divergence_ is over, and that developing countries have been growing fast enough to be driving overall global convergence in incomes (Patel et al. 2021).<sup>3</sup> This convergence narrative echoes similar recent results from Kremer et. al (2021) who find that there is now evidence in support unconditional convergence at the global level since 1990 and convergence since 2000 due to a faster catch-up growth between the poor and higher income countries. A more sober note is struck by Johnson and Papageorgiou (2020) who argue

> 1 For each global region according to PIP data (1990-2019, mean growth): East Asia & Pacific, 6.07, Europe & Central Asia, 1.24, Latin America & Caribbean, 1.93, Middle East & North Africa, 1.27, Other High Income Countries, 1.37, South Asia, 2.85, Sub-Saharan Africa,0.76, World 1.57.

> 2 https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-newreport-looks-at-lessons-from-china-s-experience

> 3 Unconditional convergence here the authors refer to an overall convergence in incomes across the world without controlling for other factors. This terminology originates in earlier work such as from Lucas (1988), King et al. (1988), and Romer (1990), who explored whether controlling for factors such as human capital, investment, financial sector development, foreign aid, trade, etc., could recover conditional convergence (Barro, 1991). Other lines of work focused on non-linearities in the growth process that create convergence clubs (Quah, 1993; Durlauf and Johnson, 1995) and on the cross-country dispersion in the level of income per capita (called σ-convergence).

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