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Lesson 10 min 20 XP

Between-Country Inequality

The vast gaps between rich and poor nations — convergence, divergence, and the role of geography and history.

The Great Divergence — and Partial Convergence

The gap between the world's richest and poorest countries is staggering. GDP per capita in the US is roughly $80,000; in Burundi, it is about $240. This 300-fold difference is a relatively recent phenomenon — in 1800, the gap between the richest and poorest countries was perhaps 5 to 1.

The 'Great Divergence' accelerated during the Industrial Revolution, as Western Europe and North America pulled ahead. Colonial exploitation, unfavorable trade terms, and institutional extraction further widened the gap. By the mid-20th century, a vast chasm separated the 'developed' and 'developing' worlds.

Since the 1990s, there has been partial convergence. China's extraordinary growth lifted its GDP per capita from $300 in 1990 to over $12,000 today. India, Vietnam, Bangladesh, and other Asian countries have also grown rapidly. However, much of Sub-Saharan Africa has stagnated, and the gap between the poorest countries and the rest has actually widened. The story of between-country inequality is one of selective convergence — some countries are catching up while others fall further behind.