Chapter 10: Growth Vis-à-Vis Development: Are the Countries Converging or Diverging Over Time?

The persistently large income gap between the developed countries (DCs) of the North and relatively less developed and developing countries (LDDCs) of the South is one of the most notable features of the international community over the last few decades. Different research works in this field have indicated that the average annual growth rate of per capita income (PCI) in LDDCs has been faster compared to that in DCs particularly since early 1990s indicating a sign of convergence in the growth process. However, the absolute gap between the DCs and LDDCs in terms of per capita Gross national product (GNP) has widened over years. In this backdrop, this chapter is an attempt to enquire into the dynamics of the gap between the developed, developing and less developed parts of the world over the period from 1990 to 2023. The beta-convergence analysis, using dynamic panel data regression, leaves emphatic evidence of conditional convergence, rather than the absolute, implying a case of typical club convergence, where the countries sharing similar conditions in health, education and prevalence of absolute poverty tend to converge in terms of PCI. This chapter essentially points out that a mere convergence in the growth rate does not necessarily translate into the narrowing of income and development gap, based on the selected 150 countries across the globe, classified with respect to income level, high, middle and low and four broad regions, namely, Latin American Caribbean (LAC), Sub-Saharan Africa (SSA), Middle East and North Africa (MNA) and East Asia Pacific (EAP), epitomising the developing world.