Explaining Success and Failure in Development
Adam Szirmai
#2008-013
Since 1950, there has been considerable diversity in developing country
experiences. Some countries and some regions have experienced rapid
growth and catch up, others have fallen behind. At a global level there
is an increasing inequality of per capita incomes. However, within the
framework of increasing inequality, some countries have experienced
accelerated catch up. The speed of catch up in the successful countries
is more rapid than in previous historical periods. This paper analyses
the sources of success and failure in economic development in the
post-war period. It applies a framework of proximate, intermediate and
ultimate causality. Proximate factors refer to the directly quantifiable
economic sources of growth, intermediate factors refer to demand and
policies, ultimate sources refer to the deeper historical, cultural,
geographic and institutional sources of development. Monocausal
explanations of success and failure are rejected. However, amongst the
various sources of growth, the paper places special emphasis on
developing countries' ability to tap into global knowledge flows. There
is not a single example of successful catch up since 1868 which did not
involve tapping into international technology. The extent to which
countries can profit from international technology flows depends on
their absorptive capacities, technological capabilities and systems of
innovation.
Keywords: Catch Up, Economic Development, Economic Growth, Advantages of
Backwardness, Absorptive Capacity
JEL Codes: O11, O33, O43, O47, P52
UNU-MERIT Working Papers
ISSN 1871-9872