In making their projections for the BRICs, Goldman drew on a cautious version of the thesis, called “conditional” convergence. Simply put, this says that poor countries will grow faster than rich ones, other things equal. Those other things, for Goldman, included a country’s level of education, its openness to trade, its internet penetration and ten other characteristics. Academics have ranged even more widely. According to Steven Durlauf of the University of Chicago, Paul Johnson of Vassar College and Jonathan Temple, a freelance economist, researchers have identified 145 plausible factors that must be accounted for. The list includes everything from inflation and foreign direct investment to religion, frosty weather and newspaper readership.
Goldman assumed that emerging economies would catch up with a productivity frontier exemplified by America. But many economies seem to converge not towards a global leader but with their neighbours or peers. Indeed, some of the best examples of convergence come from within countries or economic blocs. Poor Japanese prefectures have tended to catch up with richer ones, as have Canadian provinces, Indian states and the regions of Europe.
If the forces of convergence operate within these blocs, it is reasonable to wonder if other such groupings exist. Are there any other convergence “clubs”, rich or poor, the members of which are bunching up?
In a new book, “Global Productivity: Trends, Drivers, and Policies”, the World Bank uses an algorithm to sort through many combinations of countries, looking for groups that seem to be converging with each other. Based on the productivity performance of 97 economies since 2000, the bank identifies five clubs. The three gloomiest groups comprise fairly poor countries. A fourth contains some big ones of unfulfilled potential, such as Argentina, Brazil, Indonesia, Mexico and South Africa.