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The Convergence Hypothesis: History, Theory, and Evidence

• Published: January 1998
• Volume 9 , pages 85–105, ( 1998 )

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• Farhad Rassekh 1  

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The hypothesis that per capita output converges across economies over time represents one of the oldest controversies in economics. This essay surveys the history and development of the hypothesis, focusing particularly on its vast literature since the mid-1980s. A summary of empirical analyses, econometric issues, and various tests of the convergence hypothesis are also presented. Moreover, the essay analyzes the implications of the hypothesis for economic growth, especially as it relates to underdeveloped economies.

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Econometric Aspects of Convergence: A Survey

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Department of Economics, Barney School of Business and Public Administration, University of Hartford, West Hartford, CT, 06117, U.S.A.

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Rassekh, F. The Convergence Hypothesis: History, Theory, and Evidence. Open Economies Review 9 , 85–105 (1998). https://doi.org/10.1023/A:1008279323832

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Issue Date : January 1998

DOI : https://doi.org/10.1023/A:1008279323832

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What is convergence theory in sociology?

This theory is one of social change that has been given by economic professor Clark Kerr in a book by him and his colleagues called ’Industrialism and Industrial Man’ in the 1960s. The convergence theory is the one which postulates that all the societies as they move from the early industrial development to complete industrialization tend to move towards a condition of similarity in terms of the general societal and technological norms. This is to say that as the societies move towards development they look become alike will similar structures, which means that the differences among the societies will reduce as they are ultimately on the same path of development. This would thus lead to a single global culture.

This theory given by Clark Kerr is what is known as the ‘logic of industrialization’ which he has also mentioned in his writing, this logic is the thesis of the theory and states that industrialization everywhere has similar consequences whether the society is a capitalist one or a communist one.

This convergence may reflect in the form of what can be called the ‘catch up effect’. This ‘catch up’ refers to the process of opening up the economy of a country to the foreign economy allowing the inflow of capital, this investment helps the economy to maintain pace with the more advanced societies, this process usually takes place when the society is introduced to the industrialization process. However, there might be cases when the reverse may happen i.e. the economy may diverge instead of converging. Such divergence takes place in the case of economies in which the foreign capital is not invested, this may be due to the political and social factors such as lack of education or job training, etc. often these nations are the ones that are unstable.

It is believed that the third world nations are supposed to get out of their conditions of poverty through the process of convergence as they take up the form of western industrial societies.

The convergence theory is often related to the study of modernization, it is believed that the path of development is the one that has been taken by the western industrial societies, which will be undertaken by every society in order to reach complete development and modernization. Thus there is a foxed pattern of development which will be followed. There is thus a convergence if the ideas attitudes and beliefs, thus the overall way of thinking and doing things.

However, it has often been seen that though there are similarities among the industrialized societies, it is often only found in the case of the technology that they use and their patterns of change in this technology. However, the other aspects such as the political systems, the religious systems, and the beliefs, and even the economic conditions to a very large extent remain specific to society and thus are variable.

Thus we see that while the convergence theory has made many countries into market economies such as the ones found in the western societies, as it has in Russia and Vietnam which were communist countries earlier and are now market economies.

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