The convergence rate of countries’ development levels in the 21st century: theoretical approaches and statistical limitations

Macroeconomic instability in the period of 2020–2024 has revived discussions about its impact on economic convergence processes and methods for assessing the convergence of developing and developed countries. This paper presents a systematic analysis of modern econometric approaches and existing limitations in testing the convergence hypothesis. The methodological framework is based on classical Solow economic growth models and their extensions by R. Barro, which take into account institutional and socioeconomic factors in an open economy. However, the β-convergence identified in Barro’s cross-country models remains weak, indicating a slow process of economic convergence across countries. Over the past decade, econometrics has made significant advances, making it possible to analyze convergence using complex mathematical models such as cointegration analysis and the ARFIMA model. However, the findings are heterogeneous, making it difficult to draw a general conclusion regarding economic convergence across countries. Nevertheless, if the convergence hypothesis is accepted, this article proposes calculating the rate of convergence between countries in two ways: through average economic growth rates, by calculating the number of years required to double GDP, and using a time lag method. Although, according to the first approach, developing countries (clusters 3-5) demonstrate higher average annual growth rates than developed countries (clusters 1-2), the poorest countries (clusters 6-7) are characterized by low economic growth rates. Moreover, in a number of countries, the convergence process may slow down or completely break up due to economic and social crises. This emphasizes the importance of considering not only general trends but also the specific national characteristics of each country. Using the second method, drawing on the BRICS countries as an example, the author demonstrates an increasing economic divergence of developing countries from developed ones in the period since 1990.

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