Figure 4.4. Scatter Plot of Average Growth (YOY %), 1960–80 against 1981–2003 15
Average YOY% Growth (1981–2003)
Equatorial Guinea
10 China
Korea, Rep. of Taiwan, China 5
Botswana
Dominica
Singapore
0 -4
-2
0
2
4
Madagascar
6
8
10
Gabon
Congo, Dem. Rep. of -5 Average YOY% Growth (1960–1980) Source: Authors’ estimates. Note: Economies in the upper-right (gray) area were the consistently high performers that achieved 80th percentile growth rate (or greater) in both periods. Economies in the lower-left (dark pink) area were the consistent underperformers that achieved 20th percentile growth rate (or lower) in both periods. Economies in the upper-left (light pink) area were the late achievers that registered 20th percentile growth rates in G1 but 80th percentile growth rates in G2.
various categories, classified by their average YOY growth rates of real per capita GDP in 1960–80 (G1) and in 1981–2003 (G2). Clearly, past growth does not necessarily translate to future growth, although resources and institutions inherited from past growth do appear to feed into an economy’s endowment in the next cycle. For example, it appears that economies that do not do well in G1 tend not to do as well in G2, with Dominica and São Tomé and Príncipe being the most notable exceptions. In comparison, economies that did well in G1 have by and large managed to maintain positive, albeit lower, growth in G2, as figure 4.4 illustrates.
Divergence in Growth Experiences To attain finer granularity, it has been found to be useful to group the economies into three income bands: the top 50th percentile, the second quartile (the 25th to 50th percentile range), and those in the bottom quartile, according to their levels of real per capita GDP at five-year intervals over the period 1960–2003. Then the economies were classified into three broad categories based on their income trajectories:
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