I recently wondered, after seeing Brazil and South Korea’s striking real GDP per capita divergence, which underdeveloped economies over the past forty years most succeeded and which most failed at growing their real GDP per capita. As Scott Sumner has pointed out, many countries (including, to some extent, the U.S.) experienced a permanent decline in real per capita GDP growth around the year 1973, though some countries (e.g., in Latin America) had high growth rates until the early 1980s Volcker Shock. North Korea, the Soviet Union, Singapore, South Africa, Japan, Greece, Portugal, Spain, Canada, and other nations that had managed to make great strides between 1900 and 1973 had dramatic growth slowdowns following that year, with Spain and Portugal having a decade of stagnation between 1974 and 1984 and Greece two such decades (1974-1994!). Italy, a country with lower living standards than China in 1900 and which had surpassed the U.K. in real GDP per capita (PPP) terms by 1976, had a growth slowdown around 1993 and another one around 2003. Japan had a very famous (and seemingly permanent) growth slowdown in 1991. Japan, France and Italy had all finished their phase of catch-up growth with the U.S. by 1973 (Germany had done so by 1961).
The below are the answers to the question mentioned in the first sentence of this post. All real GDP per capita numbers are from the World Bank. They can be verified by looking at Google Public Data.
Estonia (astonishing growth from 1994 to today) and the other Baltics
Belarus (astonishing growth from 1995 to 2011, especially compared with Ukraine, but economy has stagnated for the last two years)
Armenia and Georgia (grew at almost exactly the pace and level of China until 2009, but fell behind China as these countries had a recession in 2009, while China didn’t)
East Asian Successes:
China (so far; 21X increase in GDP per capita in 40 years counts as a success in any book, even if the economy stagnates for a century after)
The Four Asian Tigers (South Korea, Taiwan, Singapore, Hong Kong) and Macau
Slower-Growing East Asian Economies (successful for any other region, but not when compared to other Asian countries):
Vietnam (Grew 4X since reforms. Overly affected by China and seems like a complete failure compared to it).
Malaysia (GDP per capita 4.2X that of 1973).
Indonesia (GDP per capita 4.6X that of 1973. Seems like a failure compared to China).
Thailand (GDP per capita 5.3X that of 1973).
Latin American and Caribbean Successes:
Chile (2013 GDP per capita is 3.3X that at time of Pinochet’s coup).
Dominican Republic (2013 GDP per capita is 2.93X that in 1973).
St. Vincent and the Grenadines (2013 GDP per capita is 3.18X that in 1973).
Belize (2013 GDP per capita 2.96X that in 1973, but has stagnated for nearly a decade).
Cabo Verde (2013 GDP per capita is 5.5X that in 1980)
Seychelles (2013 GDP per capita is 3.06X that in 1973).
Botswana (2013 GDP per capita is 6X that in 1973).
Lesotho (2013 GDP per capita is 2.93X that in 1973).
South Asian Successes:
Bhutan (miraculous growth since 1980 [GDP per capita 6.2X in 2013 compared with that of 1980] with no strong foundation of economic freedom, but, by all accounts, the best court system in South Asia).
India (2013 GDP per capita is 4.37X that in 1973).
Sri Lanka (2013 GDP per capita 4.66X that in 1973).
Mauritius (2013 GDP per capita 3.48X that in 1976).
Middle Eastern Successes:
Egypt (2013 GDP per capita 3.71X that in 1973).
Malta (2013 GDP per capita 3.68X that in 1973).
Ireland (2013 GDP per capita over 3.5X that in 1973).
Philippines (Fell into a dump between 1982 and 2003. Very instructive East Asian failure, if only for showing East Asian economies can fail in an age of microchips.)
Papua New Guinea (18% GDP per capita growth in 40 years.)
Burma and North Korea (for obvious reasons)
Latin American Disasters:
Brazil (a country that pretended to be China between 1968 and 1980; 38% GDP per capita growth between 1980 and 2013)
Mexico (a country that hasn’t lost its track record of failure since 1980; GDP per capita in 2013 20% higher than that in 1980).
Nicaragua (1976 was the best year it’s ever had).
Suriname (yes, not Latin American, but still a failure from independence to the Year 2000)
Venezuela (the classic Latin American basket case; GDP per capita today lower than that in 1964).
Argentina (moving roughly sideways since at least 1960; GDP per capita in 2006 65% higher than that in 1960, but this may be due to understated inflation).
Haiti (same place it was in the 1950s).
Guatemala, El Salvador, Honduras (all in the same boat-failures growing at 0-2.5% per year)
South Africa (fell behind Brazil in growth terms after 1974)
Madagascar (steady decline; GDP per capita is 55% of what it was in 1960)
Senegal (GDP per capita remarkably steady; no change since 1960)
Togo (economic miracle until 1969; no lasting change in GDP per capita after that even unto this day).
Malawi (economic miracle between 1960 and 1979; no lasting change in GDP per capita after that even unto this day)
Comoros (GDP per capita is 20% lower than peak in 1984).
Guinea (amazingly flat)
Kenya (strong growth until 1972, stagnation for three decades, return to less impressive growth)
Niger (fantastic decline from 1966 onward followed by stagnation)
Gambia (stagnation since 1978)
Belgian Congo (it was 2.6X better off in real GDP per capita terms under Belgium).
Djibouti (country still not up to its 1990 level of real GDP per capita).
Burundi (5% growth per 53-year period)
Ivory Coast (strong growth until 1978; then, collapse until 2011)
Now, ask yourself: what was different between the failures and successes? Both some of the Latin American failures and the Asian tigers had industrial policies. Mexico has more economic freedom than China, but the labor force in Mexico is prematurely shifting away from the productive sectors (manufacturing and agriculture) and into the famously unproductive traditional economy and services, while China has successfully continued its rapid growth. What prevented the Comoros from growing like Taiwan, Singapore, or Egypt? Why is Belarus, well known for its red tape and financial repression, one of the development successes?