Resilience to Economic Shrinking - A social capability approach to processes of catching up in the developing world since the 1950s

Over the last seventy years attempts at economic catching up, in which poor countries grow fast enough to narrow the gap to the rich countries, have largely been erratic and unsustained. However, notable exceptions do prevail. These are predominately found in Asia. To understand the reasons behind why some have succeeded while most have so far failed to catch up, development research has centred its attention on understanding the sources and drivers of economic growth. Yet, such a one-sided focus on growth neglects an important component of the development experience: the significance of resilience to economic shrinking. Asia has forged ahead of other developing regions since the 1950s not only because its economies grew more, but perhaps even more importantly, they also shrank less. With fewer economic setbacks, the catching-up process becomes continuous and consistent. In fact, it seems that the success of economic development to a large extent depends on the country’s resilience to economic shrinking.