Lin, Justin YifuRosenblatt, David2012-04-272012-04-272012-04https://hdl.handle.net/10986/6043This paper provides an historical overview of both the evolution of the economic performance of the developing world and the evolution of economic thought on development policy. The 20th century was broadly characterized by divergence between high-income countries and the developing world, with only a limited number (less than 10 percent of the economies in the world) managing to progress out of lower or middle-income status to high-income status. The last decade witnessed a sharp reversal from a pattern of divergence to convergence --particularly for a set of large middle-income countries. The latter phenomenon was also driven by increasing economic ties among developing countries, and on the intellectual scale, increased knowledge generation and sharing among the developing countries. Re-thinking development policy implies confronting these realities: 20th century economic divergence, the experience of the handful of success stories, and the recent rise of the multi-polar growth world. The paper provides descriptive data and a literature survey to document these trends. The paper also provides a brief survey of the role of multilateral institutions -- in particular, the World Bank -- in this changing context and offers suggestions on how they can adapt their strategies to improve development outcomes.CC BY 3.0 IGOADVANCED COUNTRIESADVANCED COUNTRYADVANCED ECONOMIESAGRICULTURAL PRODUCTIVITYAGRICULTUREANNUAL GROWTHAVERAGE GROWTHBANK CREDITBANK LENDINGBANK MANAGEMENTBANKRUPTCIESBANKRUPTCYBUSINESS ENVIRONMENTCAPITAL ACCUMULATIONCAPITAL FLOWSCAPITAL INTENSITYCAPITAL INVESTMENTSCAPITAL MARKETSCENTRAL BANKSCLASSICAL ECONOMICSCOMMODITIESCOMMODITYCOMMODITY PRICESCOMMUNICATION TECHNOLOGIESCOMMUNICATION TECHNOLOGYCOMPARATIVE ADVANTAGECOMPARATIVE ADVANTAGESCOMPETITIVE ADVANTAGECOMPETITIVE MARKETCOMPETITIVENESSCONSUMER DEMANDCONSUMERSCOUNTRY INEQUALITYDEBTDEBT CRISISDEMOGRAPHICDEREGULATIONDEVELOPED COUNTRIESDEVELOPED WORLDDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPING ECONOMIESDEVELOPING ECONOMYDEVELOPING REGIONSDEVELOPING WORLDDEVELOPMENT AGENCYDEVELOPMENT ASSISTANCEDEVELOPMENT ECONOMICSDEVELOPMENT POLICIESDEVELOPMENT POLICYDEVELOPMENT STRATEGYDISEQUILIBRIUMDISTRIBUTION OF INCOMEDOMESTIC ECONOMIESDYNAMIC ECONOMYDYNAMIC EMERGING ECONOMIESDYNAMIC EMERGING MARKETSECONOMETRICSECONOMIC COOPERATIONECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC POWERECONOMIC POWERSECONOMIC PROGRESSECONOMIC RELATIONSECONOMIC RESEARCHECONOMIC STRUCTUREECONOMIC THEORIESECONOMIC THEORYECONOMIC THOUGHTECONOMICS RESEARCHECONOMIES OF SCALEEDUCATION SYSTEMSEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING MARKETSENTRY POINTEXCHANGE RATEEXCHANGE RATESEXPORT GROWTHEXPORT PROCESSING ZONESEXPORTSEXTERNALITIESFACTORS OF PRODUCTIONFINANCIAL CRISISFINANCIAL FLOWFINANCIAL FLOWSFINANCIAL INSTITUTIONSFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SUPPORTFORECASTSFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN FIRMSFOREIGN INVESTORSFREE MARKETSFUTURE GROWTHGDPGDP PER CAPITAGLOBAL ECONOMIC LANDSCAPEGLOBAL ECONOMIC PROSPECTSGLOBAL ECONOMYGLOBALIZATIONGOVERNMENT INTERVENTIONSGROSS DOMESTIC PRODUCTGROWTH PERFORMANCEGROWTH RATEGROWTH RATESGROWTH THEORYHEADCOUNT POVERTYHIGH GROWTHHIGH INCOME COUNTRIESHUMAN CAPITALINCOMEINCOME GROWTHINCOME INEQUALITYINCOME LEVELSINCOMESINDUSTRIALIZED COUNTRIESINTEREST RATEINTEREST RATESINTERNATIONAL MARKETINTERNATIONAL RESERVESINVESTMENT CLIMATEJOINT VENTURESKNOWLEDGE GENERATIONLIVING STANDARDSLOW-INCOME COUNTRIESMACROECONOMIC POLICIESMACROECONOMIC STABILIZATIONMANUFACTURING INDUSTRIESMARKET ECONOMYMARKET PRICESMARXISMMIDDLE INCOME COUNTRIESMIDDLE INCOME COUNTRYMIDDLE-INCOME COUNTRIESMULTILATERAL DEVELOPMENTNATIONAL DEVELOPMENTNATIONAL ECONOMYNATURAL RESOURCENATURAL RESOURCESNEW PRODUCTOPPORTUNITY COSTSORGANIZATIONAL STRUCTURESOUTPUTOVERVALUATIONOVERVALUED EXCHANGE RATESOWNERSHIP STRUCTUREPARTICULAR COUNTRYPER CAPITA GROWTHPER CAPITA INCOMEPOLICY MAKERSPOLICY RESEARCHPOLITICAL ECONOMYPOVERTY ALLEVIATIONPREFERENTIAL ACCESSPRICE CONTROLSPRICE DECLINESPRICE DISTORTIONSPRIMARY PRODUCTSPRIVATIZATIONPRODUCTIVITYPROPERTY RIGHTSPROTECTIONISMPURCHASING POWERRAPID GROWTHRAPID INDUSTRIALIZATIONREGIONAL TRADERELATIVE INCOMERELATIVE INCOMESRENT SEEKINGRICH COUNTRIESRURAL AREASSAVINGSSMALLHOLDER AGRICULTURESOVEREIGN DEBTSTANDARD DEVIATIONSTRUCTURAL BOTTLENECKSSTRUCTURAL CHANGETAXTAX BREAKSTAX SYSTEMTAXATIONTECHNICAL ASSISTANCETECHNOLOGICAL INNOVATIONTECHNOLOGICAL PROGRESSTHIRD WORLDTRADE LIBERALIZATIONTRADE RELATIONSTRADING SYSTEMTRANSACTION COSTSTRANSITION COUNTRIESTRANSITION ECONOMIESTREASURYTREASURY SECURITIESUNEMPLOYMENTURUGUAY ROUNDVALUE ADDEDWAGESWEALTHWORLD DEVELOPMENT INDICATORSWORLD ECONOMYWTOWorld Bank10.1596/1813-9450-6040