IV.

“Catching-Up” Models of Industrialization

In recent years economists have attempted to explain the process of industrialization within a framework of “catch-up” growth. These theories set forth the premise that late industrializers can imitate technologies already in existence in the leading industrial countries, allowing them to undertake economic development and catch up to the per capita productivity levels of the leaders.

The catch-up theory predicts that per capita income levels in poor and rich countries should converge. This hypothesis has had numerous tests. There is a strong tendency toward convergence among the major industrial countries. However, when the very poor countries of the world are included, the hypothesis breaks down. A large number of poor countries have failed to industrialize and grow rapidly relative to rich countries; therefore, catching up is not an inevitable historical process.

In order to understand why the forces of catching up are only powerful in the developed world, American economist Moses Abramovitz introduced the idea of social capability, which means that relatively backward economies must reach certain social conditions to be able to adopt the technology of major industrial countries. These conditions include a large, capable workforce and a stable political system.