What causes successful late development?Insights from history

Abstract

The first graph in Diagram 1 demonstrates that today there exist extremely large differences in real income per capita between highly developed and less developed countries, especially some of the least developed ones in sub-Saharan Africa. Because the underlying domestic currency figures of GDP have been recalculated into US dollars by using purchasing power parities, the distorting effects of exchange rates in such comparisons between developed and underdeveloped economies cannot be responsible for the fact that, for example, the GDP per capita of Ethiopia in 2004 was only two per cent of America's and Ghana's a mere five per cent. Thus the diagram truly shows how poor many African countries are, even in relation to less developed countries on other continents.