catch up theory

Catching-up Theory

Introduction

The concept of catching up theory is a relatively recent one, born out of the literature examining economic development in the non-Western world. It was first introduced to address the issue of the relative lack of economic development in the developing world in comparison to countries which, historically, enjoyed greater levels of economic development. The main reason for the lack of success of the developing world was attributed to their relative technological backwardness or, quite simply, their inability to keep up with the pace of international development. The catching-up theory is founded on the idea that developing nations can learn from the experiences of more advanced countries, and that through the strategic implementation of policies and strategies, those nations can overtake their less-developed counterparts and eventually enjoy significant advantages in terms of income, output, technological advancement and other indicators.

Theorem

The catching-up theorem put forward a set of suggestions as to how a nation, or group of nations, can pursue meaningful economic development. The basic premise of the theorem is that, while catching up may be a slow and arduous process, it can be attained by investing in sectors of the economy which are deemed to be vitally important for economic growth. These sectors include education and research, infrastructure, finance and taxation, industrial policy, and technology. The theorem proposes that if sufficient efforts to develop the sectors mentioned above are made, a less-developed country can ‘catch up’ and overcome their technological gap, bridging the distance between own country and the front runners in terms of economic development.

Analysis

The catching-up theorem has been subject to much debate and analysis since its first conception. Many have suggested that it is difficult for developing countries to overcome the inherent disparities between their economic level and that of more advanced countries, whether these gaps are technological, social or educational. Others have argued that the assumptions of the theorem are too simplistic and do not take into account the range of socio-economic and political inequalities which keep certain countries at the back of the development race.

In addition, it is now recognised that the success of the catching-up theory is highly dependent upon the availability of expertise and resources in the target nation, and that these resources are often concentrated in the hands of the few. This presents a huge obstacle to any catching up attempt, since the resources for economic development are limited and thus the scope for catching up is diminished.

Finally, there are now a wide range of economic development models which challenge the assumption of the catching-up theorem. Such models focus on specific sectors of the economy and can be tailored to the particular economic make-up of a nation.

Conclusion

The catching-up theory still remains an influential approach to economic development. It was the catalyst for a body of literature around the subject of economic development and its potential to increase the wealth of those nations at the back of the development race. While there are criticisms of the assumptions of the theory, it is still widely recognised as a major force in the attempt to facilitate development in the developing world. The focus of the literature has now extended beyond individual nations and embraces an assessment of the potential of regional and global initiatives to facilitate catching-up in the developing world.

The theory of catch-up is a comprehensive economic development theory proposed by the American economist Gunther A.F. Schum. It generally believes that similar to the rapid growth of small countries, developing countries and their marginal population, with the help of imported Western technology and investment education, institutional system, capital and other factors, can achieve rapid economic growth, so as to eliminate the gap between rich and poor countries.

The Theory of Catch-up believes that constant technological convergence between different countries exists. When countries and regions that have lower income than others learn to develop and apply advanced technologies, they can quickly achieve economic development, which often accelerates the process of narrowing the gap. Generally, the country lags in technology, market, capital and so on, often catches up the gap with the advanced countries in the shortest time.

At the same time, the theory of catch-up advocates a market economic system, believes that market mechanism and economic liberalization should be the main form of economic operation and development. The private sector should be encouraged, and entrepreneurship and innovation should be encouraged. At the same time, the government should also play a role in supporting and promoting economic development, reforming and perfecting the economic system, and accelerating the development of various sectors through macro controls.

In conclusion, the Theory of Catch-up has made a great contribution to the economic development of developing countries, providing a theoretical system of market economy and a road map of economic development. This theory has provided the theoretical basis for market economic reform. In the pursuit of economic development, the theory of catch-up pursues balanced and rapid economic growth.