Fundamental Limits to Economic Development in Developing and Underdeveloped Countries Imposed by Global Hierarchy

Gao, Jianbo; Wang, Fanglei; Liu, Bin; Liu, Feiyan; Nielbo, Kristoffer

doi:10.2139/ssrn.4472308

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Fundamental Limits to Economic Development in Developing and Underdeveloped Countries Imposed by Global Hierarchy

27 Pages Posted: 7 Jun 2023

See all articles by Jianbo Gao

Jianbo Gao

Guangxi University - Institute of Complexity Science and Big Data Technology

Despite great leaps in science, technology, and human civilization since World War II, many countries in the world have been stuck in “middle income” traps or remained hopelessly poor. Why do such phenomena happen and how long may they last? To answer these questions, we introduce a new metric, the revealed comparative wealth (RCW), whose value of 1 represents the world average, and develop a theory of global hierarchical attractor (GHA), which is characterized by a Zipf-Mandelbrot law (ZML) for the yearly ranked RCW for all the countries in the world. The fundamental reason for the existence of GHA is market competition, comparative advantage, and international division of labor. The mathematical structure of ZML imposes fundamental limits to world economic development, and sheds light on why “middle income” traps have persisted as well as why dependency theory has not brought about much wonder in developing and underdeveloped economies.

Keywords: Global hierarchical attractor (GHA), Revealed comparative wealth (RCW), Zipf-Mandelbrot law (ZML), Economic Development, Middle-income trap

Suggested Citation: Suggested Citation

Gao, Jianbo and Wang, Fanglei and Liu, Bin and Liu, Feiyan and Nielbo, Kristoffer, Fundamental Limits to Economic Development in Developing and Underdeveloped Countries Imposed by Global Hierarchy. Available at SSRN: https://ssrn.com/abstract=4472308 or http://dx.doi.org/10.2139/ssrn.4472308