BUSINESS
05/28/2013 02:21 pm ET Updated May 28, 2013

Income Gap Between Western World, Everyone Else Grew 733 Percent Over 200 Years: Study

AP

Two hundred years can make a world of difference.

The gap in income between Western countries and non-Western countries shot up 733 percent between 1800 and 2000, according to a recent study from Diego Comin, a professor at Harvard Business School, and Marti Mestieri, a researcher at the Toulouse School of Economics. Put another way: Slightly more than 200 years ago there was a 90 percent difference in income between Western Europe (and its offshoots) and the rest of the world. By 2000 that difference had swelled to 750 percent, according to the study.

The researchers blame a large part of that growing gap on two things: developing countries’ limited access to new technologies, and the relatively slower rate at which those residents adopt those innovations.

One way to solve this problem is to create policies that aim to help bring new technologies to poor and middle-income countries, as well as policies that help those countries adopt them, the researchers wrote in a column for VoxEU.org, a portal with research and resources set up by the Centre for Economic Policy Research.

Some companies like Google -- which is funding and developing wireless internet networks in emerging markets -- are making efforts to boost technology offerings around the world, but such efforts likely won't be enough to reverse 200 years of history.

Why? Because while researchers note that boosts in productivity are closely correlated with the introduction and adoption of new technologies, other, more sinister explanations for the growing gap are also to blame.

One such explanation is the European colonization of the last 500 years, which often introduced economic institutions, like forced labor, aimed at draining the resources of the non-Western countries they conquered. The result was that colonized countries that were the richest and most advanced hundreds of years ago are now some of the poorest, according to the New York Review of Books.

At least the trend could be reversing course. Rich countries’ economic output is expected to grow at a rate of only 1.2 percent rate this year, much less than the more than 5 percent in emerging markets, according to the International Monetary Fund’s World Economic Outlook.

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