The data for Figure 1.19, showing GDP per capita divergence from 1928 to 2018, originates from the Maddison Project Database, specifically the 2020 version. This update, titled 'Maddison style estimates of the evolution of the world economy. A new 2020 update', was developed by Jutta Bolt and Jan Luiten van Zanden.

Google

Figure 1.19, which covers the period from 1928 to 2018, illustrates the divergence in GDP per capita among countries that were latecomers to the capitalist revolution. It provides evidence for the varied success of capitalist economies by showing the contrasting growth trajectories of nations like Botswana, South Korea, and Nigeria. A note on the data clarifies that the series for the Former Soviet Union excludes the Russian Federation after 1992.

Figure 1.19: Divergence of GDP per capita among latecomers to the capitalist revolution (1928–2018)

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

The divergent economic paths of Botswana and Nigeria in the 20th century serve as a key example of how institutional quality can affect growth. Despite both African nations being rich in natural resources—diamonds in Botswana and oil in Nigeria—Botswana achieved sustained growth while Nigeria's progress was comparatively unsuccessful. This contrast is largely attributed to differences in their institutional quality, such as the extent of corruption and how government funds were managed.

Botswana vs. Nigeria: Divergent 20th Century Economic Growth

South Korea is highlighted as a top economic performer in Figure 1.19. This is demonstrated by comparing its growth to Nigeria's: while their GDP per capita was equal in 1950, by 2013 South Korea's had grown to be six times greater.

South Korea vs. Nigeria: Economic Divergence (1950-2013)

Data Source for Figure 1.19: Maddison Project Database (2020)

In 1928, the Soviet Union's GDP per capita was one-third of Argentina's, yet it exceeded the levels in both Brazil and South Korea. Under its system of communist central planning, the Soviet Union experienced consistent growth for nearly fifty years. This economic expansion was substantial enough to significantly surpass Brazil's GDP per capita and eventually overtake Argentina's before the end of Communist Party rule in 1990.

Learn Before

Related