The income gap between the global North (the advanced economies of the core) and the global South (the developing economies of the periphery) has increased by between 170% and 270% since 1960, according to a study by the Institute for Environmental Science and Technology at the Universitat Autònoma de Barcelona (ICTA-UAB), Spain, recently published in the journal New Political Economy. The research, conducted by ICTA-UAB economists Jason Hickel and Dylan Sullivan, delivers a blow to the popular narrative that poorer countries are "catching up" to richer nations through capitalist growth.

The study, titled "The myth of catch-up development: trends in core-periphery inequality from 1960 to 2023", is the first to analyze income inequality over the entire period with complete annual data for 173 countries representing 99.9% of the world population. The findings challenge claims made by prominent figures like Steven Pinker, who in his 2018 book Enlightenment Now argued that capitalism and market liberalization are driving a "Great Convergence".


Key Findings

• Absolute inequality has skyrocketed: The core has captured 4 to 10 times more income growth than the periphery since 1960, depending on the currency conversion method used.
• Relative convergence is minimal: Since 1960 the ratio of the periphery’s income to the core has increased by at most 3 percentage points. Furthermore, what progress has occurred is due entirely to an improvement in the position of China. Outside of China, the relative position of the periphery has deteriorated.
• The core is an increasingly exclusive faction: While a handful of peripheral states have been integrated into the core for geopolitical reasons, the vast majority of the periphery is not moving into the core. On the contrary, the share of the world population living in the periphery has increased from 80% in 1960 to 86% in 2023.
• China is the exception, not the rule: China is the only peripheral region that has meaningfully improved its relative position, yet its GDP per capita remains just 22-38% of the core level—similar to the position achieved by Latin America, West Asia & North Africa, and Eastern Europe in the 1960s and 1970s, before the process of market liberalization.

The Neoliberal Era: A Period of Divergence

The study identifies the 1980s and 1990s—the era of market liberalization and structural adjustment programs imposed by the IMF and the World Bank—as a period of intensifying core-periphery inequality. During this time, four of the seven peripheral regions experienced severe and prolonged economic contractions:

• Latin America's income declined by 7% and took 13 years to recover.
• The Middle East and North Africa saw income drop 25%, taking 25 years to recover.
• Eastern Europe and Central Asia experienced a 36% decline, with a 17-year recovery period.
• Sub-Saharan Africa's income fell by 23%, requiring 36 years to recover.

"For comparison, the Great Recession in the core caused income to contract by only 4%, and the region regained its pre-crisis income level within six years," the authors note. "The recessions during the rise of neoliberalism in the periphery were on average six times deeper and lasted four times longer."

A New Core for Geopolitical Reasons

While 18 relatively small states—including South Korea, Taiwan, Greece, Portugal, and several Eastern European countries—have been reclassified as "advanced economies" by the IMF since 1980, the study emphasizes that these cases represent exceptional geopolitical integration rather than a generalizable development pathway.

According to Jason Hickel, ICREA Professor at ICTA-UAB: "These countries are not randomly distributed across the globe; they are located almost exclusively in Southern Europe, East Asia and on the eastern border of the EU, forming a cordon sanitaire around the former socialist bloc. Their integration into the core served US geopolitical strategy during the Cold War and after."

The study documents how the United States provided massive economic and military aid to these strategic allies—with South Korea receiving more US aid between 1953 and 1961 than the World Bank lent to all independent Third World countries combined. Israel has received approximately $310 billion (constant 2022 dollars) in US economic and military aid since 1946, around double the amount given to any other country.

Dylan Sullivan, PhD candidate at ICTA-UAB and Macquarie University, commented: "The conventional narrative tells us that poor countries are simply 'behind' and will eventually catch up by following the same path as rich countries. Our research shows this is fundamentally wrong. The core-periphery divide isn't a development gap—it's a structural feature of the capitalist world economy.”

Sullivan concluded: "If we want genuine development in the Global South, we need to be honest about the structural constraints. Real progress will require Southern governments to delink from the imperial core, build sovereign industrial capacity, develop South-South trade, and reduce dependence on core currencies. The evidence shows that catch-up is not going to happen within the existing rules of the game."