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What Is Convergence Theory?

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Convergence theory presumes that as nations move from the early stages of industrialization toward becoming fully industrialized , they begin to resemble other industrialized societies in terms of societal norms and technology.

The characteristics of these nations effectively converge. Ultimately, this could lead to a unified global culture if nothing impeded the process.

Convergence theory has its roots in the functionalist perspective of economics which assumes that societies have certain requirements that must be met if they are to survive and operate effectively.

Convergence theory became popular in the 1960s when it was formulated by the University of California, Berkeley Professor of Economics Clark Kerr.

Some theorists have since expounded upon Kerr's original premise. They say industrialized nations may become more alike in some ways than in others.

Convergence theory is not an across-the-board transformation. Although technologies may be shared , it's not as likely that more fundamental aspects of life such as religion and politics would necessarily converge—though they may.

Convergence vs. Divergence

Convergence theory is also sometimes referred to as the "catch-up effect."

When technology is introduced to nations still in the early stages of industrialization, money from other nations may pour in to develop and take advantage of this opportunity. These nations may become more accessible and susceptible to international markets. This allows them to "catch up" with more advanced nations.

If capital is not invested in these countries, however, and if international markets do not take notice or find that opportunity is viable there, no catch-up can occur. The country is then said to have diverged rather than converged.

Unstable nations are more likely to diverge because they are unable to converge due to political or social-structural factors, such as lack of educational or job-training resources. Convergence theory, therefore, would not apply to them.

Convergence theory also allows that the economies of developing nations will grow more rapidly than those of industrialized countries under these circumstances. Therefore, all should reach an equal footing eventually.

Some examples of convergence theory include Russia and Vietnam, formerly purely communist countries that have eased away from strict communist doctrines as the economies in other countries, such as the United States, have burgeoned.

State-controlled socialism is less the norm in these countries now than is market socialism, which allows for economic fluctuations and, in some cases, private businesses as well. Russia and Vietnam have both experienced economic growth as their socialistic rules and politics have changed and relaxed to some degree.

Former World War II Axis nations including Italy, Germany, and Japan rebuilt their economic bases into economies not dissimilar to those that existed among the Allied Powers of the United States, the Soviet Union, and Great Britain.

More recently, in the mid-20th century, some East Asian countries converged with other more developed nations. Singapore , South Korea, and Taiwan are now all considered to be developed, industrialized nations.

Sociological Critiques

Convergence theory is an economic theory that presupposes that the concept of development is

a universally good thing
defined by economic growth.

It frames convergence with supposedly "developed" nations as a goal of so-called "undeveloped" or "developing" nations, and in doing so, fails to account for the numerous negative outcomes that often follow this economically-focused model of development.

Many sociologists, postcolonial scholars, and environmental scientists have observed that this type of development often only further enriches the already wealthy, and/or creates or expands a middle class while exacerbating the poverty and poor quality of life experienced by the majority of the nation in question.

Additionally, it is a form of development that typically relies on the over-use of natural resources, displaces subsistence and small-scale agriculture, and causes widespread pollution and damage to the natural habitat.

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Research Highlights

The convergence hypothesis

Research Highlights Article

April 6, 2020

Are poor countries catching up with rich countries?

Tyler Smith

The economies of today’s wealthiest nations raced ahead of the rest of the world about two centuries ago. That event initiated a new era in economic history, one defined by growth.

More recently, countries like Japan seem to have successfully copied this playbook, and it appears others like China are following suit. But unfortunately those countries are the exception rather than the rule, according to a paper in the Journal of Economic Literature .

Authors Paul Johnson and Chris Papageorgiou found there’s little evidence that national economies are catching up to their richest peers. Most low-income countries haven’t been able to maintain what growth spurts they’ve had like traditional economic theory would predict.

“The consensus that we find in the literature leads us to believe that poor countries, unless something changes, are destined to stay poor,” Johnson told the AEA in an interview.

In fact, slowdowns in the poorest countries have left millions in extreme poverty . Understanding which countries are catching up and how they’re doing so could help explain the elusive origins of economic growth.

The consensus that we find in the literature leads us to believe that poor countries, unless something changes, are destined to stay poor. Paul Johnson

The debate over catch-up growth—what economists have dubbed the convergence hypothesis —has a long history. The authors choose to focus on research published over the last 30 years.

In this recent research, capital, technology, and productivity have been at the root of most understandings of economic growth and convergence. But that has traditionally led economists to conclude that however poor a country starts off, it will adopt the best practices of the rich countries and eventually be just as well-off as their forerunners.

That’s the theory. But when the authors looked at the numbers over the last 60 years that’s not what they saw.

Data from the Penn World Tables —which covers 182 countries—revealed an unprecedented level of global growth over the period, but it was spread unevenly across the globe and across income levels.

The researchers separated countries into three income levels: low, middle, and high.

Each decade, high-income countries tended to grow faster than middle-income countries, which in turn tended to grow faster than low-income countries.

Every group experienced periods of relatively slow growth. But low-income countries actually experienced negative average growth rates during the 80s and 90s. The contractions were mostly driven by periods of extreme violence, corruption, and other state dysfunctions.

This unequal growth has led to steadily more and more dispersed national incomes around the world—the opposite of what a strong version of the convergence hypothesis predicts.

But while there wasn’t any absolute convergence, the researchers did find that the literature supported the idea of “convergence clubs.” In other words, countries that started with a similar income level in 1960 still had a similar income level in 2010, the end of the dataset.

The convergence clubs might be a clue for national leaders. According to Johnson, it suggests that policy interventions need to be bold enough to reach the next rung in the income ladder, or they risk slow, start-and-stop growth.

It also might help make sense of why some countries jump out of low-income clubs and eventually join the richest one, while other countries are stuck in poverty or middle-income traps.

Still other types of convergence are possible. Previous work has found that within some industries, such as manufacturing, convergence is happening. Countries may need to organize their workforces around these sectors to jumpstart growth.

As the authors point out, even half a century is short compared to the long run. The limited data span may mean that pessimism isn’t ultimately warranted, but the authors’ work warns against being complacent.

“There have been signs of a little catch-up over the last few years . . . but we don't know if that will continue,” Johnson said.

“ What Remains of Cross-Country Convergence? ” appears in the March issue of the Journal of Economic Literature.

The Great Divergence

This video explains how technology diffusion contributes to the growing productivity gap between rich and poor countries.

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What Is the Catch-Up Effect?

How It Works
Limitations

The Bottom Line

Macroeconomics

The Catch-Up Effect Definition and Theory of Convergence

The catch-up effect is a theory that the per capita incomes of all economies will eventually converge.

This theory is based on the observation that underdeveloped economies tend to grow more rapidly than wealthier economies. As a result, the less wealthy economies literally catch up to the more robust economies.

The catch-up effect is also referred to as the theory of convergence .

Key Takeaways

The catch-up effect is a theory that the per capita incomes of developing economies catch up to those of more developed economies.
It is based on the law of diminishing marginal returns , applied to investment at the national level.
It also involves the empirical observation that growth rates tend to slow as an economy matures.
Developing nations can enhance their catch-up effect by opening up their economies to free trade.
They should pursue "social capabilities," or the ability to absorb new technology, attract capital, and participate in global markets.

Understanding the Catch-Up Effect

The catch-up effect, or theory of convergence, is predicated on several key ideas.

1. One is the law of diminishing marginal returns . This is the idea that, as a country invests and profits, the amount gained from the investment will eventually decline as the level of investment rises.

Each time a country invests, it benefits slightly less from that investment. So, returns on capital investments in capital-rich countries are not as large as they would be in developing countries.

2. This is backed up by the empirical observation that more developed economies tend to grow at a slower, though more stable, rate than less developed countries.

According to the World Bank, high-income countries averaged 2.8% gross domestic product (GDP) growth in 2022, versus 3.6% for middle-income countries and 3.4% for low-income countries.

3. Developing and underdeveloped countries may also be able to experience more rapid growth because they can replicate the production methods, technologies, policies, and institutions of developed countries.

This is also known as a second-mover advantage. When developing markets have access to the technological know-how of the advanced nations, they can experience rapid rates of growth.

Limitations to the Catch-Up Effect

Lack of capital.

Although developing countries can see faster economic growth than more economically advanced countries, the limitations posed by a lack of capital can greatly reduce a developing country's ability to catch up.

Historically, some developing countries have been very successful in managing resources and securing capital to efficiently increase economic productivity . However, this has not become the norm on a global scale.

Lack of Social Capabilities

Economist Moses Abramowitz wrote that in order for countries to benefit from the catch-up effect, they need to develop and leverage what he called "social capabilities."

These include the ability to absorb new technology, attract capital, and participate in global markets. This means that if technology is not freely traded, or is prohibitively expensive, then the catch-up effect won't occur.

Lack of Open Trade

The adoption of open trade policies, especially with respect to international trade, also plays a role. According to a longitudinal study by economists Jeffrey Sachs and Andrew Warner, national economic policies of free trade and openness are associated with more rapid growth.

Studying 111 countries from 1970 to 1989, the researchers found that industrialized nations had a growth rate of 2.3% per year per capita. Developing countries with open trade policies had a rate of 4.5%. And developing countries with more protectionist and closed economy policies had a growth rate of only 2%.

Population Growth

Another major obstacle for the catch-up effect is that per capita income is not just a function of GDP, but also of a country's population growth. Less developed countries tend to have higher population growth than developed economies. The greater the number of people, the less the per capita income.

According to the World Bank figures for 2022, more developed countries ( OECD members) experienced 0.3% average population growth, while the UN-classified least developed countries had an average 2.3% population growth rate.

Economic convergence appears to stem primarily from latecomer countries borrowing or imitating the established technologies available in industrialized countries.

Example of the Catch-Up Effect

During the period between 1911 to 1940, Japan was the fastest-growing economy in the world. It colonized and invested heavily in its neighbors South Korea and Taiwan, contributing to their economic growth as well. After the Second World War, however, Japan's economy lay in tatters.

The country rebuilt a sustainable environment for economic growth during the 1950s and began importing machinery and technology from the United States. It clocked incredible growth rates in the period from 1960 to the early 1980s.

As Japan's economy powered forward, the U.S. economy, which was a source for much of Japan's infrastructural and industrial underpinnings, hummed along. Then by the late 1970s, when the Japanese economy ranked among the world's top five, its growth rate had slowed down.

The economies of the Asian Tigers , a moniker used to describe the rapid growth of economies in Southeast Asia, have seen a similar trajectory, displaying rapid economic growth during the initial years of their development, followed by a more moderate (and declining) growth rate as they transitioned from a developing stage to that of developed.

How Can Underdeveloped Countries Benefit From the Catch-Up Effect?

Those without technological innovations and the financial resources to develop them can borrow from what has already been innovated and developed successfully to grow their GDP and per capita income.

Has Globalization Made the Catch-Up Effect More Prevalent?

Perhaps. For example, globalization has made advances in technologies and supply chain innovations more readily available to underdeveloped and developing nations, due to the loosening of trade restrictions and economic cooperation between countries.

Why Does the Catch-Up Effect Diminish for Industrialized Countries?

The effect is far less for such countries because, with their greater amounts of capital, freer trade, and beneficial economic policies, they have less room in which to achieve more.

The catch-up effect refers to a theory that holds that the per capita incomes of emerging and developing nations will eventually converge with the per capita incomes of more developed, wealthier countries.

The effect can be hampered by certain circumstances, such as the lack of capital and open trade policies, and the inability to attract investments.

The World Bank. " GDP Growth (annual %) ."

Abramowitz, Moses, via JSTOR. " Catching Up, Forging Ahead, Falling Behind ." Journal of Economic History, vol 46, no. 2, June 1986, pp. 385-406.

Brookings. " Economic Reform and the Process of Global Integration ."

The World Bank. " Population Growth (annual %) ."

Oxford Academic. " Catching Up or Developing Differently? Techno-Institutional Learning with a Sustainable Planet in Mind ."

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The convergence hypothesis: History, theory, and evidence

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Growth Theories and Convergence Hypothesis

First Online: 30 June 2020

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Robin Maialeh 2 , 3

Part of the book series: Contributions to Economics ((CE))

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In ancient Greek, the word theorein and its connected noun theoría link to observation, consideration and looking more closely at the subject matter; they simply lead to scientific contemplation and seeking truth. Today, in the context of highly specialized fields of science, seeking the eternal truth is not at stake. But still, each field of scientific exploration aims to increase understanding of its subject matter through formulating theories. Above that, theoretical insights do not contribute to interpretation and understanding of a system for its own sake. It is hard to imagine that a system can be modified without understanding its fundamental laws, when only disordered empirical facts are on the table. The everlasting struggle to master conditions that determine human lives therefore lies in theoretical comprehension, which gives possibilities to actively shape researched systems including socioeconomic order. Empirical findings thus refer to the surface, how a phenomenon demonstrate itself to human senses, while theoretical insights, based on logical explanation of the empirical dimension, reveals the underlying ‘nature’ of a phenomenon. In terms of time, purely empiricist approach may refer only to what has already happened, while theoretical insights, which forms the underlying model, furnish our understanding with a certain extrapolating power. In response to empirical findings on inequality, the present chapter focuses on distributional dynamics of mainstream economic theories.

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A bit less known is that these conditions were firstly introduced by Uzawa ( 1963 ).

Continuous time is considered in order to be in line with upcoming Ramsey-Cass-Koopmans model.

Variables in the intensive form use small letters.

For the sake of simplicity, it is abstracted from depreciation.

The reason is that along the balanced growth path, where the consumption per capita grows at rate g , the integrand term in U grows at rate − ρ + n + (1 − θ ) g . As we want the integral to converge, the term must be negative.

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Convergence Theory: 10 Examples and Definition

Viktoriya Sus (MA)

Viktoriya Sus is an academic writer specializing mainly in economics and business from Ukraine. She holds a Master’s degree in International Business from Lviv National University and has more than 6 years of experience writing for different clients. Viktoriya is passionate about researching the latest trends in economics and business. However, she also loves to explore different topics such as psychology, philosophy, and more.

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This article was peer-reviewed and edited by Chris Drew (PhD). The review process on Helpful Professor involves having a PhD level expert fact check, edit, and contribute to articles. Reviewers ensure all content reflects expert academic consensus and is backed up with reference to academic studies. Dr. Drew has published over 20 academic articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education and holds a PhD in Education from ACU.

Convergence theory predicts that cultures worldwide will gradually grow increasingly similar due to globalization.

According to this theory, the further nations progress along their industrialization journey towards becoming fully industrialized powers, they will increasingly emulate other developed countries in terms of technology and cultural norms , leading to one transnational culture .

So, as countries become increasingly linked and globalized, they will tend to imitate each other’s governmental systems (such as democracy rather than communism), economic models (capitalism, socialism, or a blend of both), and collective values.

Such a convergence process is believed to lead to a more homogenous world where nations and societies are increasingly similar.

Definition of the Convergence Theory

The convergence theory states that as the world continues to develop, expansion in technology and globalization will cause cultures around the globe to increasingly become more similar in a process called cultural convergence (Hess, 2016).

Over time, such a convergence of diverse social groups could lead to a unified global society with greater uniformity amongst its members.

According to Wilensky (2002),

“…convergence theory is the idea that as rich countries got richer, they developed similar economic, political, and social structures and to some extent common values and beliefs” (p. 3).

Bryant and Peck (2007) state that “the industrialization process is so strong it substantially transforms any society that is industrializing” (p. 189).

In other words, globalization and increased economic integration are believed to lead to a more homogenous world where different nations and societies become increasingly similar regarding their economic, political, and cultural practices.

Convergence theory provides a helpful lens for studying sociological topics such as socioeconomic development, modernization, and globalization.

Overall, convergence theory is a helpful tool for understanding the effects that increased global interconnectedness can have on societies and cultures worldwide.

10 Examples of Convergence Theory

The spread of the English language : As countries become more intertwined, English has risen to the top as a global language of commerce, education, and communication. For example, in numerous nations worldwide, it is now employed as an aviation lingua franca, while many international businesses also rely on it when corresponding. In essence, English is the bridge that brings people from around the globe together.
The rise of high-tech industries : As the world progresses and countries become more interconnected, they often follow similar industrial trends. For instance, biotechnology and information technology are two sectors in which many nations invest heavily; The United States and China both devote considerable resources to cyberspace security research.
The increase of democracy : For a long time, democracy was considered a concept exclusive to the Western world and was only prevalent in European and American countries. Nonetheless, it has spread to many other nations in recent decades, indicating a trend toward the convergence of political systems toward democracy.
The spread of consumer culture : The expansion of consumer culture has been accelerated by globalization, leading to an almost worldwide standardization in the types of products consumed. Today, many people worldwide go to McDonald’s, shop at Walmart, and wear clothing made by Nike.
Religious convergence : As interfaith dialogue and progressive religious movements gain traction, we have begun to see a convergence of beliefs and spiritual practices across cultures. This shift towards accepting different faiths can lead to greater understanding among people from various backgrounds, fostering an environment where diversity is respected and celebrated.
Social convergence : As countries become more interconnected, they adopt similar social norms and values. It is evident in attitudes toward gender, marriage, and sexuality. So, in some respects, societies are becoming more alike.
The rise of the middle class : Countries worldwide are increasingly experiencing growth in their middle classes, leading to a convergence of lifestyles and behaviors.
The spread of mass media : As nations become more interrelated, they often adopt comparable preferences regarding the media they consume. It can result in a more integrated global culture and a greater mutual understanding of diverse cultures.
The spread of education : Globalization has seen an increased spread of education across the world. Now, many countries are adopting the UK and US systems of education and teaching methods, leading to greater convergence in educational practices.
The prevalence of global health : The increased spread of medical knowledge and the emergence of international health programs has led to a more unified approach to health care across nations. For example, more countries are adopting the World Health Organization’s guidelines and standards for health.

Origins and History of Convergence Theory

In the mid-1960s, American sociologist Clark Kerr introduced a groundbreaking concept – the theory of convergence. It asserted that societies around the globe were continuously becoming more and more alike despite diverse cultural backgrounds (Brubaker, 2022) .

Kerr believed that this process was being driven by changes in technology, communication, and transportation that allowed for increased international trade and collaboration.

He argued that homogenizing cultures would create a utopian world without conflicts and disparities (Brubaker, 2022).

Kerr’s ideas were developed further by other sociologists in the late 20th century. These theorists argued that convergence was more than just a simple process and could have a tangible impact on how societies interact.

The technological version of Galbraith’s “convergence” has also gained wide popularity. He linked the future of the industrial system with the convergence of two systems – capitalist and socialist (Mishra, 1976).

Galbraith explained the inevitability of “convergence” because the large scale of production, characteristic of developed capitalist and socialist countries, requires an approximately similar planning and organization system.

One of the options for convergence was proposed by the outstanding Dutch mathematician and economist Tinbergen, who put forward the theory of “optimal order” (Don, 2019).

According to Tinbergen, as a result of the synthesis of both systems – some elements of “capitalist efficiency” and “socialist equality” – an “optimal system” is formed, the main principles of which are the peaceful coexistence and business cooperation of states (Don, 2019).

Today, convergence theory is used to understand the effects of globalization and how it impacts different societies. It also explains why specific trends, such as consumer culture and democracy, have become more prevalent in recent years.

Overall, convergence theory has become essential for understanding the forces shaping our world today.

Convergence Theory vs. Divergence Theory

Convergence theory seeks to explain how societies become more alike, while divergence theory accounts for the ways in which they grow increasingly distinct.

Convergence theory suggests that countries adopt similar social norms and values as they become more interconnected (Hess, 2016).

On the other hand, divergence theory claims that as societies move further from each other geographically and culturally, they become increasingly dissimilar (Brubaker, 2022).

So, while some countries embrace same-sex marriage as an accepted form of union, other nations condemn it entirely. Divergence theorists explain this difference due to two societies growing apart and developing distinct values.

Ultimately, divergence and convergence theories explain how societies change over time. While the former focuses on differences between cultures, the latter focuses on similarities that might arise from increased global connections.

Importance of Convergence Theory

Convergence is not just one of the hobbies or inventions but a requirement of the time associated with the search for socio-economic alternatives.

In particular, the 2020 economic crunch made it clear that the world could not adequately respond under the existing socio-economic model since its structure is based on methodological individualism.

Thus, the idea of the adherents of convergence was confirmed that the market form of economy applies only to a part of socio-economic relations and, in many cases, turns out to be harmful and powerless.

Furthermore, convergence theory also has implications for social cohesion and stability in any community.

As societies become more similar, there may be less social tension and conflict as people share similar values, beliefs, and practices, promoting social harmony and reducing the risk of civil unrest.

Notably, convergence theory can encourage international cooperation and collaboration. It suggests that countries can learn from each other’s experiences and adopt best practices to promote growth and development.

Critique of Convergence Theory

As convergence theory has become highly regarded in many fields, it is still subject to criticism since ignores cultural and historical differences, overlooks power and inequality, and oversimplifies complexity .

1. It Ignores Cultural and Historical Differences

Convergence theory assumes that all societies will converge towards similar values, beliefs, and practices as they become more modern or more connected to the global economy.

However, this assumption ignores that different societies have unique cultural and historical backgrounds that shape their development differently (Hay & Couldry, 2011).

For example, the modernization process in Japan has been very different from that in India or Brazil.

2. It Overlooks the role of Power and Inequality

Convergence theory often overlooks the role of power and inequality in shaping social change .

Furthermore, it disregards the fact that many societies may move in different directions, with some populations more likely to experience advantages from convergence than others.

3. It Oversimplifies Complexity

Convergence theory tends to oversimplify the complex social, economic, and political processes that shape social change.

This idea presumes that all societies will progress towards the same goal, regardless of any distinctions in economic standings or governmental systems.

In reality, many factors influence the development of societies, making it difficult to predict which direction a community will take accurately (Form, 1979).

So, while convergence theory may help understand broad trends, it cannot account for the unique characteristics of different societies or the subtle interactions between various factors.

Convergence theory predicts that as the world becomes increasingly globalized, cultures worldwide will gradually grow more similar.

This theory argues that technological, economic, and political developments lead to a convergence of social structures and cultural norms.

The convergence process could lead to a unified global society with greater uniformity among its members, thus providing a helpful lens for studying topics such as socioeconomic development, modernization, and globalization.

Its origins are traced back to the mid-1960s when Clark Kerr states that societies around the globe were continuously becoming more and more alike due to technological, communication, and transportation advancements.

Today, convergence theory is a valuable tool for understanding the effects of increased global interconnectedness on societies and cultures worldwide.

Brubaker, D. (2022). Psychosocial political dysfunction of the republican party. New York: Archway Publishing.

Bryant, C. D., & Peck, D. L. (2007). 21st century sociology: A reference handbook. Thousand Oaks Sage Publications.

Don, F. J. H. (2019). The influence of Jan Tinbergen on Dutch economic policy. De Economist, 167 (3), 259–282. https://doi.org/10.1007/s10645-019-09333- 1

Form, W. (1979). Comparative industrial sociology and the convergence hypothesis. Annual Review of Sociology, 5 , 1–25. https://www.jstor.org/stable/2945945

Hay, J., & Couldry, N. (2011). Rethinking convergence/culture. Cultural Studies, 25 (4-5), 473–486. https://doi.org/10.1080/09502386.2011.600527

Hess, P. N. (2016). Economic growth and sustainable development . London: Abingdon.

Mishra, R. (1976). Convergence theory and social change: The development of welfare in Britain and the Soviet Union. Comparative Studies in Society and History, 18 (1), 28–56. https://www.jstor.org/stable/178161

Wilensky, H. L. (2002). Rich democracies. Univesity of California Press.

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Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd-2/ 15 Theory of Planned Behavior Examples